Fujiwara and Campbell (2011) summarise the advantages of the life satisfaction approach to valuation as follows: i) the cost and time-effectiveness of the data collection; ii) the ability to use statistics drawn from very large and representative samples (in contrast to stated preference techniques, which require a separate data collection exercise); iii) the possible application to a whole variety of life events and circumstances; iv) the presence of fewer biases and less strategic behaviour on the part of respondents; and v) the fact that the data do not rest on assumptions about market structure. Conversely, some of the disadvantages highlighted by these authors include: i) difficulties in estimating the marginal utility of income, including the effects of relative as compared to absolute income, as well as the indirect effects of income and variables that operate counter to the effects of income; and ii) difficulties in estimating the marginal utility of the non-market factor, including indirect effects and the consumption of complementary goods alongside the non-market factor. All of the main approaches to monetary valuation of non-market factors (revealed preference, stated preference and subjective well-being-based estimates) are associated with methodological shortcomings, but the nature of these shortcomings is different in each case. Using several different methods provides more information than relying on a single approach, and using subjective well-being data offers a relatively low-cost option that avoids some of the biases connected to preference-based approaches. However, as the method based on subjective well-being is still in its infancy, significant methodological and interpretive questions remain, and it should therefore be regarded as a complement to rather than a replacement for existing methods.

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