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The implications on willingness to pay of a stochastic treatment of attribute processing in stated choice studies

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  • Hensher, David A.
  • Rose, John
  • Bertoia, Tony

Abstract

Individuals processing the information in a stated choice experiment are asked to evaluate a set of attributes offered and to choose their most preferred alternative. It has always been thought that some attributes are not attended to in this process for many reasons, including a coping strategy to handle their perception of the complexity of the choice task. However analysts proceed, with rare exception, to estimate discrete choice models as if all attributes have influenced the outcome to some degree. In this paper we investigate the implications of bounding the attribute processing task by attribute elimination through not attending to one or more attributes. Using a sample of car non-commuters in Sydney we estimate a mixed logit model in which all attributes are assumed to be attended to, and models which assume that certain attribute(s) are not attended to, based on supplementary information provided by respondents. The supplementary information is accounted for in a deterministic and a stochastic way; the latter in recognition of the analyst's lack of full information on why a specific attribute processing (AP) strategy was adopted by each sampled individual. We compare the value of travel time savings distribution under alternative attribute processing regimes. As expected, there are noticeable variations in the mean and standard deviation willingness to pay (WTP) across the three AP strategies.

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  • Hensher, David A. & Rose, John & Bertoia, Tony, 2007. "The implications on willingness to pay of a stochastic treatment of attribute processing in stated choice studies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(2), pages 73-89, March.
    • Handle: RePEc:eee:transe:v:43:y:2007:i:2:p:73-89
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    Cited by:

    1. Windle, Jill & Rolfe, John & Brouwer, Roy, 2009. "Public values for improved water security for domestic and environmental use," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47627, Australian Agricultural and Resource Economics Society.
    2. Mark J. Koetse, 2017. "Effects of payment vehicle non-attendance in choice experiments on value estimates and the WTA–WTP disparity," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 6(3), pages 225-245, July.
    3. William Henry Kaye-Blake & Walt L. Abell & Eva Zellman, 2009. "Respondents' ignoring of attribute information in a choice modelling survey," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 547-564, October.
    4. Balbontin, Camila & Hensher, David A., 2021. "Understanding business location decision making for transport planning: An investigation of the role of process rules in identifying influences on firm location," Journal of Transport Geography, Elsevier, vol. 91(C).
    5. Espinosa, Maria & Rodriguez, Macario & Madureira, Livia Maria Costa & Santos, Jose Lima & Gomez y Paloma, Sergio, 2014. "Are models and respondents talking the same language: evidence from stated and inferred discontinuous preferences in a choice experiment valuing public goods?," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182668, European Association of Agricultural Economists.
    6. Kosenius, Anna-Kaisa, 2013. "Preference discontinuity in choice experiment: Determinants and implications," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 138-145.
    7. Ariane Kehlbacher & Kelvin Balcombe & Richard Bennett, 2013. "Stated Attribute Non-attendance in Successive Choice Experiments," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 693-706, September.
    8. Lydia Chikumbi & Milan Scasny, "undated". "Does ‘price framing’ influence empirical estimates in Discrete Choice Experiments: The case study for the South African wine industry," Working Papers 878, Economic Research Southern Africa.
    9. Zhu, Wei & Timmermans, Harry, 2010. "Modeling simplifying information processing strategies in conjoint experiments," Transportation Research Part B: Methodological, Elsevier, vol. 44(6), pages 764-780, July.
    10. Collins, Andrew T. & Rose, John M. & Hensher, David A., 2013. "Specification issues in a generalised random parameters attribute nonattendance model," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 234-253.
    11. Abbie A. Rogers, 2013. "Public and Expert Preference Divergence: Evidence from a Choice Experiment of Marine Reserves in Australia," Land Economics, University of Wisconsin Press, vol. 89(2), pages 346-370.
    12. Mohammed Alemu & Morten Mørkbak & Søren Olsen & Carsten Jensen, 2013. "Attending to the Reasons for Attribute Non-attendance in Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(3), pages 333-359, March.
    13. Collins, Andrew T. & Hess, Stephane & Rose, John M., 2013. "Choice modelling with search and sort data from an interactive choice experiment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 56(C), pages 36-45.
    14. Caputo, Vincenzina & Loo, Ellen J. Van & Scarpa, Riccardo & Nayga, Rodolfo M. Jr & Verbeke, Wim, 2014. "“Using Experiments to Address Attribute Non-attendance in Consumer Food Choices”," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 177173, Agricultural and Applied Economics Association.
    15. Danny Campbell & W. Hutchinson & Riccardo Scarpa, 2008. "Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(3), pages 401-417, November.
    16. David Hensher & John Rose & William Greene, 2012. "Inferring attribute non-attendance from stated choice data: implications for willingness to pay estimates and a warning for stated choice experiment design," Transportation, Springer, vol. 39(2), pages 235-245, March.
    17. Hess, Stephane & Hensher, David A., 2010. "Using conditioning on observed choices to retrieve individual-specific attribute processing strategies," Transportation Research Part B: Methodological, Elsevier, vol. 44(6), pages 781-790, July.
    18. Andrew Collins & John Rose & Stephane Hess, 2012. "Interactive stated choice surveys: a study of air travel behaviour," Transportation, Springer, vol. 39(1), pages 55-79, January.
    19. David Hensher, 2014. "Attribute processing as a behavioural strategy in choice making," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 12, pages 268-289, Edward Elgar Publishing.
    20. Sandra Notaro & Maria De Salvo & Roberta Raffaelli, 2022. "Estimating Willingness to Pay for Alpine Pastures: A Discrete Choice Experiment Accounting for Attribute Non-Attendance," Sustainability, MDPI, vol. 14(7), pages 1-15, March.
    21. Sean Puckett & David Hensher & John Rose & Andrew Collins, 2007. "Design and development of a stated choice experiment for interdependent agents: accounting for interactions between buyers and sellers of urban freight services," Transportation, Springer, vol. 34(4), pages 429-451, July.
    22. Gonçalves, Tânia & Lourenço-Gomes, Lina & Pinto, Lígia M. Costa, 2022. "The role of attribute non-attendance on consumer decision-making: Theoretical insights and empirical evidence," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 788-805.
    23. Weller, Priska & Oehlmann, Malte & Mariel, Petr & Meyerhoff, Jürgen, 2014. "Stated and inferred attribute non-attendance in a design of designs approach," Journal of choice modelling, Elsevier, vol. 11(C), pages 43-56.
    24. Caspar G Chorus & John M Rose & David A Hensher, 2013. "Regret Minimization or Utility Maximization: It Depends on the Attribute," Environment and Planning B, , vol. 40(1), pages 154-169, February.

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