In the past few decades, the choice experiment method has become popular among the public and private sectors in developed countries as a guide for efficient and effective decision-making. In the public sector, this tool’s popularity can be attributed to its ability to capture the marginal economic values—costs and benefits—of improvements in, or provision of, public goods and services. These values can in turn be used to conduct cost–benefit analyses that influence the design of sustainable policies and programs that enhance social welfare. In the private sector, this method is a frequently used market-research tool that helps in understanding the demand structures for private goods and services not yet on the market.
One advantage of the choice experiment method is that it can be used in both ex ante planning and ex post assessment of decisions. However, its application in a developing-country context is still relatively limited. This seminar introduces the method as a development economics tool that can provide relevant information for public and private decision-making processes in developing countries, and highlights the theoretical and practical issues that should guide the design and implementation of choice experiment studies. Case-study examples will be provided from a recently published book, titled Choice Experiments in Developing Countries: Implementation, Challenges and Policy Implications, that reviews various applications of the choice experiment method to a wide array of environmental and agricultural issues in developing countries.