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Inconsistent and Lexicographic Choices in Stated Preference Analysis

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Author Info
Jan Rouwendal () (Department of Economics, Vrije Universiteit Amsterdam)
Arianne T. de Blaeij (Department of Economics, Vrije Universiteit Amsterdam)

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Abstract

In stated choice (SC) data inconsistent and lexicographic choice behavior is often observed. It is sometimes recommended to remove data with these characteristics from the analysis. In this paper we reconsider this recommendation. In our data many respondents have inconsistent choice patterns, which appear to be due to incidental mistakes. Moreover, a large number of the consistent respondents have lexicographic choice patterns. We show that the logit model, which is the most popular tool for analyzing SP data, is compatible with inconsistent and seemingly lexicographic choice behavior and that it offers precise predictions about the occurrence of such choices. In the data at our disposal the actual number of respondents who made different choices in two identical choice situations is substantially lower than that predicted by the model, whereas the number of respondents with lexicographic answers is much larger than predicted. The logit model is then ada! pted in various ways to bring it in better agreement with the facts. In particular, we introduce an effect of remembering the earlier choice when the same situation recurs, the presence of latent classes of lexicographic respondents and the presence of heterogeneity among respondents.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-038/3.

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Date of creation: 05 Apr 2004
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Handle: RePEc:dgr:uvatin:20040038

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Related research
Keywords: stated preference analysis choice experiments inconsistent choices lexicographic choices value of time value of a statistical life

Find related papers by JEL classification:
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
R41 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Transportation: Demand, Supply, and Congestion

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-73, July. [Downloadable!] (restricted)
  2. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, December. [Downloadable!]
  3. de Palma, Andre & Myers, Gordon M & Papageorgiou, Yorgos Y, 1994. "Rational Choice under an Imperfect Ability to Choose," American Economic Review, American Economic Association, vol. 84(3), pages 419-40, June. [Downloadable!] (restricted)
  4. Hausman, J. A. & Abrevaya, Jason & Scott-Morton, F. M., 1998. "Misclassification of the dependent variable in a discrete-response setting," Journal of Econometrics, Elsevier, vol. 87(2), pages 239-269, September. [Downloadable!] (restricted)
  5. Dan Ariely & George Loewenstein & Drazen Prelec, 2003. ""Coherent Arbitrariness": Stable Demand Curves Without Stable Preferences," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 73-105, February. [Downloadable!] (restricted)
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