IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/23163.html
   My bibliography  Save this paper

A comparison of responses to single and repeated discrete choice questions

Author

Listed:
  • McNair, Ben J.
  • Bennett, Jeff
  • Hensher, David A.

Abstract

According to neoclassical economic theory, a stated preference elicitation format comprising a single binary choice between the status quo and one alternative is incentive compatible under certain conditions. Formats typically used in choice experiments comprising a sequence of discrete choice questions do not hold this property. In this paper, the effect on stated preferences of expanding the number of binary choice tasks per respondent from one to four is tested using a split sample treatment in an attribute-based survey relating to the undergrounding of overhead electricity and telecommunications wires. We find evidence to suggest that presenting multiple choice tasks per respondent decreases estimates of expected willingness to pay. Preferences stated in the first of a sequence of choice tasks are not significantly different from those stated in the incentive compatible single binary choice task, but, in subsequent choice tasks, responses are influenced by cost levels observed in past questions. Three behavioural explanations can be advanced – weak strategic misrepresentation, reference point revision and cost-driven value learning. The evidence is contrary to the standard assumption of truthful response with stable preferences.

Suggested Citation

  • McNair, Ben J. & Bennett, Jeff & Hensher, David A., 2010. "A comparison of responses to single and repeated discrete choice questions," MPRA Paper 23163, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:23163
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/23163/1/MPRA_paper_23163.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gabriela Scheufele & Jeff Bennett, 2010. "Ordering effects and strategic response in discrete choice experiments," Environmental Economics Research Hub Research Reports 1093, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    2. DeShazo, J. R., 2002. "Designing Transactions without Framing Effects in Iterative Question Formats," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 360-385, May.
    3. Ladenburg, Jacob & Olsen, Søren Bøye, 2008. "Gender-specific starting point bias in choice experiments: Evidence from an empirical study," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 275-285, November.
    4. Flachaire, Emmanuel & Hollard, Guillaume, 2007. "Starting point bias and respondent uncertainty in dichotomous choice contingent valuation surveys," Resource and Energy Economics, Elsevier, vol. 29(3), pages 183-194, September.
    5. Gabriela Scheufele & Jeff Bennett, 2013. "Effects of alternative elicitation formats in discrete choice experiments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 214-233, April.
    6. Racevskis, Laila A. & Lupi, Frank, 2008. "Incentive Compatibility in an Attribute-Based Referendum Model," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6477, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
    8. Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, vol. 49(1), pages 105-130, January.
    9. Carlsson, Fredrik & Martinsson, Peter, 2008. "Does it matter when a power outage occurs? -- A choice experiment study on the willingness to pay to avoid power outages," Energy Economics, Elsevier, vol. 30(3), pages 1232-1245, May.
    10. Herriges, Joseph A. & Shogren, Jason F., 1996. "Starting Point Bias in Dichotomous Choice Valuation with Follow-Up Questioning," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 112-131, January.
    11. Ben McNair & Peter Abelson, 2010. "Estimating the Value of Undergrounding Electricity and Telecommunications Networks," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(4), pages 376-388, December.
    12. McFadden, Daniel, 1980. "Econometric Models for Probabilistic Choice among Products," The Journal of Business, University of Chicago Press, vol. 53(3), pages 13-29, July.
    13. Caussade, Sebastián & Ortúzar, Juan de Dios & Rizzi, Luis I. & Hensher, David A., 2005. "Assessing the influence of design dimensions on stated choice experiment estimates," Transportation Research Part B: Methodological, Elsevier, vol. 39(7), pages 621-640, August.
    14. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    15. Jayson L. Lusk & Ted C. Schroeder, 2004. "Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
    16. Stanley W. Hamilton & Gregory M. Schwann, 1995. "Do High Voltage Electric Transmission Lines Affect Property Value?," Land Economics, University of Wisconsin Press, vol. 71(4), pages 436-444.
    17. Beenstock, Michael & Goldin, Ephraim & Haitovsky, Yoel, 1998. "Response bias in a conjoint analysis of power outages," Energy Economics, Elsevier, vol. 20(2), pages 135-156, April.
    18. Cameron Trudy Ann & Quiggin John, 1994. "Estimation Using Contingent Valuation Data from a Dichotomous Choice with Follow-Up Questionnaire," Journal of Environmental Economics and Management, Elsevier, vol. 27(3), pages 218-234, November.
    19. Francois Des Rosiers, 2002. "Power Lines, Visual Encumbrance and House Values: A Microspatial Approach to Impact Measurement," Journal of Real Estate Research, American Real Estate Society, vol. 23(3), pages 275-302.
    20. Lorenzo Masiero & David Hensher, 2011. "Shift of reference point and implications on behavioral reaction to gains and losses," Transportation, Springer, vol. 38(2), pages 249-271, March.
    21. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    22. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    23. Loeb, Martin & Magat, Wesley A, 1979. "A Decentralized Method for Utility Regulation," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 399-404, October.
    24. Cameron, Trudy Ann & Poe, Gregory L. & Ethier, Robert G. & Schulze, William D., 2002. "Alternative Non-market Value-Elicitation Methods: Are the Underlying Preferences the Same?," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 391-425, November.
    25. Kevin J. Boyle & Richard C. Bishop & Michael P. Welsh, 1985. "Starting Point Bias in Contingent Valuation Bidding Games," Land Economics, University of Wisconsin Press, vol. 62(2), pages 188-194.
    26. Michael Hanemann & John Loomis & Barbara Kanninen, 1991. "Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1255-1263.
    27. Riccardo Scarpa & John M. Rose, 2008. "Design efficiency for non-market valuation with choice modelling: how to measure it, what to report and why ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 253-282, September.
    28. Peter F. Colwell, 1990. "Power Lines and Land Value," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 117-128.
    29. Hensher, David A., 2010. "Hypothetical bias, choice experiments and willingness to pay," Transportation Research Part B: Methodological, Elsevier, vol. 44(6), pages 735-752, July.
    30. Carson, Katherine Silz & Chilton, Susan M. & Hutchinson, W. George, 2009. "Necessary conditions for demand revelation in double referenda," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 219-225, March.
    31. Day, Brett & Pinto Prades, Jose-Luis, 2010. "Ordering anomalies in choice experiments," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 271-285, May.
    32. Jacinto Braga & Chris Starmer, 2005. "Preference Anomalies, Preference Elicitation and the Discovered Preference Hypothesis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(1), pages 55-89, September.
    33. Bateman, Ian J. & Burgess, Diane & Hutchinson, W. George & Matthews, David I., 2008. "Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 127-141, March.
    34. McConnell K. E., 1995. "Consumer Surplus from Discrete Choice Models," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 263-270, November.
    35. Thomas P. Holmes & Kevin J. Boyle, 2005. "Dynamic Learning and Context-Dependence in Sequential, Attribute-Based, Stated-Preference Valuation Questions," Land Economics, University of Wisconsin Press, vol. 81(1).
    36. Christine Seller & John R. Stoll & Jean-Paul Chavas, 1985. "Validation of Empirical Measures of Welfare Change: A Comparison of Nonmarket Techniques," Land Economics, University of Wisconsin Press, vol. 62(2), pages 156-175.
    37. Boyle, Kevin J. & Morrison, Mark & Taylor, Laura O., 2004. "Why Value Estimates Generated Using Choice Modelling Exceed Contingent Valuation: Further Experimental Evidence," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58370, Australian Agricultural and Resource Economics Society.
    38. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    39. Louviere, Jordan J & Hensher, David A, 1983. "Using Discrete Choice Models with Experimental Design Data to Forecast Consumer Demand for a Unique Cultural Event," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 10(3), pages 348-361, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ben McNair & David Hensher & Jeff Bennett, 2012. "Modelling Heterogeneity in Response Behaviour Towards a Sequence of Discrete Choice Questions: A Probabilistic Decision Process Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(4), pages 599-616, April.
    2. McNair, Ben J. & Hensher, David A. & Bennett, Jeff, 2010. "Modelling heterogeneity in response behaviour towards a sequence of discrete choice questions: a latent class approach," MPRA Paper 23427, University Library of Munich, Germany.
    3. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    4. Day, Brett & Bateman, Ian J. & Carson, Richard T. & Dupont, Diane & Louviere, Jordan J. & Morimoto, Sanae & Scarpa, Riccardo & Wang, Paul, 2012. "Ordering effects and choice set awareness in repeat-response stated preference studies," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 73-91.
    5. Mikołaj Czajkowski & Marek Giergiczny & William H. Greene, 2012. "Learning and Fatigue Effects Revisited. The Impact of Accounting for Unobservable Preference and Scale Heterogeneity on Perceived Ordering Effects in Multiple Choice Task Discrete Choice Experiments," Working Papers 2012-08, Faculty of Economic Sciences, University of Warsaw.
    6. Gelo, Dambala & Koch, Steven F., 2015. "Contingent valuation of community forestry programs in Ethiopia: Controlling for preference anomalies in double-bounded CVM," Ecological Economics, Elsevier, vol. 114(C), pages 79-89.
    7. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    8. Aravena, Claudia & Hutchinson, W. George & Carlsson, Fredrik & Matthews, David I, 2015. "Testing preference formation in learning design contingent valuation (LDCV) using advanced information and repetitivetreatments," Working Papers in Economics 619, University of Gothenburg, Department of Economics.
    9. Watson, Verity & Ryan, Mandy, 2007. "Exploring preference anomalies in double bounded contingent valuation," Journal of Health Economics, Elsevier, vol. 26(3), pages 463-482, May.
    10. Day, Brett & Pinto Prades, Jose-Luis, 2010. "Ordering anomalies in choice experiments," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 271-285, May.
    11. McNair, Ben J. & Bennett, Jeff & Hensher, David A. & Rose, John M., 2011. "Households' willingness to pay for overhead-to-underground conversion of electricity distribution networks," Energy Policy, Elsevier, vol. 39(5), pages 2560-2567, May.
    12. Thijs Dekker & Paul Koster & Roy Brouwer, 2014. "Changing with the Tide: Semiparametric Estimation of Preference Dynamics," Land Economics, University of Wisconsin Press, vol. 90(4), pages 717-745.
    13. Tomasz Gajderowicz & Gabriela Grotkowska, 2019. "Polarization of Tastes: Stated Preference Stability in Sequential Discrete Choices," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 70-87.
    14. Hermann Donfouet & P. Jeanty & P.-A. Mahieu, 2014. "Dealing with internal inconsistency in double-bounded dichotomous choice: an application to community-based health insurance," Empirical Economics, Springer, vol. 46(1), pages 317-328, February.
    15. Mikolaj Czajkowski & Marek Giergiczny & William H. Greene, 2014. "Learning and Fatigue Effects Revisited: Investigating the Effects of Accounting for Unobservable Preference and Scale Heterogeneity," Land Economics, University of Wisconsin Press, vol. 90(2), pages 324-351.
    16. Gabriela Scheufele & Jeff Bennett, 2012. "Response Strategies and Learning in Discrete Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(3), pages 435-453, July.
    17. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    18. Ladenburg, Jacob & Olsen, Søren Bøye, 2008. "Gender-specific starting point bias in choice experiments: Evidence from an empirical study," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 275-285, November.
    19. Bateman, Ian J. & Burgess, Diane & Hutchinson, W. George & Matthews, David I., 2008. "Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 127-141, March.
    20. Glenk, Klaus & Meyerhoff, Jürgen & Akaichi, Faical & Martin-Ortega, Julia, 2019. "Revisiting cost vector effects in discrete choice experiments," Resource and Energy Economics, Elsevier, vol. 57(C), pages 135-155.

    More about this item

    Keywords

    Choice experiment; willingness-to-pay; incentive compatibility; order effects; undergrounding;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:23163. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.