ECONOMIC VALUATION BY THE METHOD OF PAIRED-COMPARISON, WITH EMPHASIS ON EVALUATION OF THE TRANSITIVITY AXIOM

The paired comparison (PC) method is rued to investigate reliability, transitivity, and decision time for binary choices among goods and sum s of money. The PC method reveals inconsistent choices and yields indi vidual preference order over the set of items being compared. The data reported support the transitivity assumption and demonstrate high rel iability for individual preference order. The paper also discusses ris ing the PC method to obtain conservative median and mean estimates of willingness to accept compensation for public and private goods. The P C method may prove useful for valuing public goods, and warrants furth er study.