This is not a Wikipedia article: It is an individual user's work-in-progress page, and may be incomplete and/or unreliable. For guidance on developing this draft, see Wikipedia:So you made a userspace draft. Find sources: Google (books · news · scholar · free images · WP refs) · FENS · JSTOR · TWL |
Preference is just another word for "demand"...as in supply and demand. The aggregate of individual preferences (all our preferences added together) is the total demand. For private goods...our spending (time/money) decisions express our true preferences/demand and our demand shapes the supply. For public goods, because of the free-rider problem, we are compelled to pay taxes. But our current method of paying taxes does not convey our true preferences/values for public goods.
There are three main ways of trying to discern people's true preferences...stated preference (contingent valuation), revealed preference and demonstrated preference.
Identification keys are used by biologists to identify species based on their characteristics. Here's a very basic identification key for the three most common "species" in the preference revelation "genera".
How much public funds should be spent on protecting the environment? That would depend on the demand for environmental protection. Here's how the three different "species" would try and determine the demand...
Each method would produce a different answer. In other words...each method would indicate a different amount of demand. Therefore, each method would supply a different amount of environmental protection. The less accurate a method was...the greater the disparity between supply and demand...the greater the shortage/surplus of environmental protection...the greater the amount of deadweight loss.
The vast majority of economists agree that our true preferences/values are required to determine the optimal supply of public goods. Because they understand the basic concept of supply and demand, many economists have spent large amounts of time/energy/effort trying to develop accurate preference revelation mechanisms. The more accurate the mechanism...the more efficient the allocation of public funds would be.
For example, Caltech scientists even developed a way to try and read your mind in order to try and accurately determine exactly how much you value public goods.
There's plenty of scholarly material on the subject. If you're interested in this subject...then demonstrate your preference by reading these reliable sources, sharing any other relevant, reliable sources that you might find...and making constructive edits to the relevant entries.