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'Irrational' stated preferences: a quantitative and qualitative investigation

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  • Fernando San Miguel

    (Institución Futuro, Plaza del Palacio de Gorraiz, Navarra, Spain)

  • Mandy Ryan

    (Health Economics Research Unit, University of Aberdeen, Scotland)

  • Mabelle Amaya-Amaya

    (Health Economics Research Unit, University of Aberdeen, Scotland)

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    Abstract

    Individuals' rationality has been a key issue long debated in Economics. While normative theories establish the way 'rational' consumers should behave, many empirical studies have documented numerous systematic violations of normative principles. This has led some to question the validity of classic economic models as an adequate approximation of individuals' real decision-making. This paper aims to shed more light on this debate. A stated preference choice experiment was set up to test rational choice properties. Attention was given to the extent to which satisfaction of such tests is related to both the complexity of the design, and subject characteristics. Quantitative and qualitative methods are applied. The majority of respondents passed the rationality tests. Satisfaction of the tests was sensitive to normatively irrelevant factors such as the complexity of the task and demographic characteristics. A significant proportion of those individuals who 'failed' seem to have reformulated the experiment in some way in their mental process. Implications for the design and analyses of future DCEs are discussed. Copyright © 2004 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.912
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 14 (2005)
    Issue (Month): 3 ()
    Pages: 307-322

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    Handle: RePEc:wly:hlthec:v:14:y:2005:i:3:p:307-322

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    Cited by:
    1. Araña, Jorge E. & León, Carmelo J. & Hanemann, Michael W., 2008. "Emotions and decision rules in discrete choice experiments for valuing health care programmes for the elderly," Journal of Health Economics, Elsevier, vol. 27(3), pages 753-769, May.
    2. Karolin Becker & Peter Zweifel, 2005. "Cost Sharing in Health Insurance: An Instrument for Risk Selection?," SOI - Working Papers 0513, Socioeconomic Institute - University of Zurich.
    3. Semra Özdemir & Ateesha F. Mohamed & F. Reed Johnson & A. Brett Hauber, 2010. "Who pays attention in stated-choice surveys?," Health Economics, John Wiley & Sons, Ltd., vol. 19(1), pages 111-118.
    4. Campbell, Danny, 2007. "Combining mixed logit models and random effects models to identify the determinants of willingness to pay for rural landscape improvements," 81st Annual Conference, April 2-4, 2007, Reading University 7975, Agricultural Economics Society.
    5. Ratcliffe, Julie & Bekker, Hilary L. & Dolan, Paul & Edlin, Richard, 2009. "Examining the attitudes and preferences of health care decision-makers in relation to access, equity and cost-effectiveness: A discrete choice experiment," Health Policy, Elsevier, vol. 90(1), pages 45-57, April.
    6. Mandy Ryan & Verity Watson & Vikki Entwistle, 2009. "Rationalising the 'irrational': a think aloud study of discrete choice experiment responses," Health Economics, John Wiley & Sons, Ltd., vol. 18(3), pages 321-336.
    7. Emily Lancsar & Jordan Louviere, 2006. "Deleting 'irrational' responses from discrete choice experiments: a case of investigating or imposing preferences?," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 797-811.

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