Modeling non-compensatory preferences in environmental valuation
While the compensatory model of choice dominates the environmental valuation literature, non-compensatory models, where individuals do not tradeoff one attribute for another, are sometimes found to be better representations of choice behavior. Most non-compensatory models employ “cutoffs”, the point at which utility abruptly changes. But cutoffs are usually elicited directly from respondents using a stated preference question. Such elicitation could be inaccurate and might introduce bias to the decision process. In this article, we develop a model that estimates cutoff levels endogenously.