Valuing non-market goods: A comparison of preference-based and experience-based approaches

In order to value non-market goods, many governments and organisations elicit individuals’ revealed or stated preferences in relation to those goods. We compare this conventional approach to that of subjective well-being (SWB), which is based on individuals’ ratings of their happiness or life satisfaction rather than on their preferences. In the context of urban regeneration, we find that monetary estimates from SWB data are significantly higher than from hedonic pricing and willingness-topay data. Loss aversion in the presence of mental accounting in preferences and unspecified or unknown time duration in experiences might explain some of the difference.