Analyzing Preferences for Investment Projects: A Multidimensional Scaling Approach*

Most investment analysis methods use some type of benefit/cost analysis procedure to determine project desirability. This paper examines an alternative method that uses multidimensional scaling methods to determine project desirability on the basis of preference rather than economic feasibility. The underlying model is outlined, and the results of a pilot study designed to determine the usefulness of the proposed methodology are outlined. It is concluded that these suggested procedures are useful adjuncts to conventional methods and that they should be considered by decision makers.