Preference elicitation methods and equivalent income: an overview

Pre-print, Working paper: The equivalent income is a preference-based, interpersonally comparable measure of well-being. Although its theoretical foundations are well-established, empirical applications remain limited, primarily due to the detailed data requirements on individuals' preferences across various wellbeing dimensions. This paper reviews the literature on preference elicitation methods with a focus on estimating equivalent income. We examine several survey-based methods, including contingent valuation, multi-attribute choice or rating experiments, and life satisfaction regressions. The review highlights the advantages and limitations of each method, emphasizing the considerable scope for methodological improvements and innovations.

Author(s)

Shaun da Costa, Koen Decancq, Marc Fleurbaey, Erik Schokkaert

Date of publication
  • 2024
Keywords JEL
B4 D12 D63
Keywords
  • Equivalent income
  • Stated preferences
  • Contingent valuation
  • Life satisfaction
Internal reference
  • PSE Working Papers n°2024-60
Pages
  • 52 p.
Version
  • 1