Spatial heterogeneity in stated preference valuation: Status, challenges and road ahead

This paper reviews the progress made over the past three decades in controlling for spatial heterogeneity in stated preference valuation, focusing on applications to environmental valuation. Spatial heterogeneity can strongly impact value estimates, so failure to account for it can compromise their validity, reliability and transferability. Therefore, this paper addresses the following objectives: i. to present the current state-of-knowledge and review some of the main issues that have been raised over the years in relation to spatial heterogeneity in stated preference valuation; ii. to review some techniques that have been applied so far to control for spatial heterogeneity; iii. to highlight unresolved issues linked with accounting for spatial heterogeneity; iv. to suggest potential directions for future research.