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What’s appropriate? Investigating the Effects of Attribute Level Framing and Changing Cost Levels in Choice Experiments

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Author Info
Marit E Kragt () (Crawford School of Economics and Government, the Australian National University, Australia)
Jeff Bennett () (Crawford School of Economics and Government, the Australian National University, Australia)

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Abstract

Choice Experiments w are increasingly used to estimate the values of non-market goods and services. A cost attribute is typically included in a CE questionnaire to enable the estimation of monetary values for changes in the non-market attributes presented. Notwithstanding the central importance of the cost attribute, limited research has been undertaken on the impacts of varying the levels of the cost attribute on respondents’ choices in CE surveys. Furthermore, the ways in which the levels of non-market attributes are described to respondents - the ‘attribute frame’ - may affect value estimates. The challenge for CE practitioners is to identify the ‘appropriate’ attribute frames and range in cost levels. In this report, the impacts of changing cost levels, the impacts of describing non-market attributes as absolute levels or in relative terms, and of using positive versus negative contextual descriptions of attribute levels are assessed. These tests were performed using data from a CE on catchment management in Tasmania, Australia. Contrary to a priori expectations, including explicit information cues about relative attribute levels in the choice sets is found not to affect stated preferences. The data reveal significant differences in value estimates when attribute levels are described as a ‘loss’, compared to a ‘presence’. Furthermore, comparisons between different split samples provide evidence that respondents’ preferences are impacted by changing the level of the cost attribute, with higher levels leading to significantly higher estimates of WTP for one of the three environmental attributes.

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Paper provided by Environmental Economics Research Hub, Crawford School, Australian National University in its series Environmental Economics Research Hub Research Reports with number 0917.

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Handle: RePEc:een:eenhrr:0917

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Keywords: Choice experiments; Mixed Logit models; Environmental valuation; Attribute framing; Cost bias;

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