Democracy and valuation: A reply to Schläpfer (2016)

This paper is a critical appraisal of Schläpfer's (2016) proposal of a Democratic Valuation (DV) methodology to value public goods. While we appreciate attempts to address the shortcomings of conventional stated preference techniques, we have some reservations regarding DV. Our paper critically reviews the following characteristics of the proposed methodology: i) referendum format as decision-making mechanism, ii) single-dimensionality in the description of the policy issue to be valued, and iii) preference formation through provision of detailed information. Finally, we 'calibrate' Democratic Valuation against another alternative to conventional stated preference approaches, namely Deliberative Monetary Valuation (DMV). We argue that DMV addresses many of Schläpfer's concerns regarding stated preference techniques and at the same time avoids some of the problems generated by DV.