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Addressing empirical challenges related to the incentive compatibility of stated preference methods

Author

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  • Mikołaj Czajkowski

    (Faculty of Economic Sciences, University of Warsaw)

  • Christian A. Vossler

    (Department of Economics, Howard H. Center for Public Policy, University of Tennessee)

  • Wiktor Budziński

    (Faculty of Economic Sciences, University of Warsaw)

  • Aleksandra Wiśniewska

    (Faculty of Economic Sciences, University of Warsaw)

  • Ewa Zawojska

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

An emerging theoretical literature focused on the incentive compatibility of stated preference surveys offers a new lens through which to view extant evidence on external validity, and provides guidance for practitioners. However, critical theoretical assumptions rest on latent respondent beliefs, such as the belief that respondents view surveys as potentially influencing policy (i.e., policy consequentiality), which gives rise to pressing empirical challenges. In this study, we develop a Hybrid Mixed Logit model capable of integrating multiple latent beliefs, and subjective measures of these beliefs, into discrete choice models of stated preferences. Further, we provide a split-sample test of the effects of exogenous information signals related to policy consequentiality. Our results suggest some potential for researchers to induce desired beliefs through simple information signals and, importantly, that latent beliefs and information signals significantly influence elicited willingness to pay.

Suggested Citation

  • Mikołaj Czajkowski & Christian A. Vossler & Wiktor Budziński & Aleksandra Wiśniewska & Ewa Zawojska, 2015. "Addressing empirical challenges related to the incentive compatibility of stated preference methods," Working Papers 2015-31, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2015-31
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    More about this item

    Keywords

    discrete choice experiment; stated preferences; consequentiality; field experiment; hybrid mixed logit model;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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