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Complexity in choice experiments: choice of the status quo alternative and implications for welfare measurement

  • Boxall, Peter C.
  • Adamowicz, Wiktor L.
  • Moon, Amanda

We examine the propensity of respondents to choose the status quo (SQ) or current situation alternative as a function of complexity in two separate state-of-the-world choice experiments. Complexity in each choice set was characterized as the number of single and multiple changes in levels of attributes from the current situation and the order of the choice task in the sequence of multiple tasks provided to respondents. We show that increasing complexity leads to increased choice of the SQ and that a respondent’s age and level of education also influenced this choice. We outline the effects of the alternate approaches for incorporating the SQ into welfare measurement. These findings have implications for the design of stated preference experiments, examining passive use values and for empirical analysis leading to welfare measurement.

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Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 53 (2009)
Issue (Month): 4 (December)

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Handle: RePEc:ags:aareaj:161986
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  1. Samuelson, William & Zeckhauser, Richard, 1988. " Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
  2. Swait, Joffre & Adamowicz, Wiktor, 2001. " The Influence of Task Complexity on Consumer Choice: A Latent Class Model of Decision Strategy Switching," Journal of Consumer Research, Oxford University Press, vol. 28(1), pages 135-48, June.
  3. Dhar, Ravi, 1997. " Consumer Preference for a No-Choice Option," Journal of Consumer Research, Oxford University Press, vol. 24(2), pages 215-31, September.
  4. Hartman, Raymond S. & Donae, Michael J. & Woo, Chi-Keung, 1990. "Status quo bias in the measurement of value of service," Resources and Energy, Elsevier, vol. 12(2), pages 197-214, July.
  5. Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2008. "How are preferences revealed?," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1787-1794, August.
  6. Roger H. von Haefen & D. Matthew Massey & Wiktor L. Adamowicz, 2005. "Serial Nonparticipation in Repeated Discrete Choice Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1061-1076.
  7. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-19, November.
  8. DeShazo, J. R. & Fermo, German, 2002. "Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 123-143, July.
  9. Wiktor Adamowicz & Peter Boxall & Michael Williams & Jordan Louviere, 1998. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 64-75.
  10. Jordan J. Louviere & Towhidul Islam & Nada Wasi & Deborah Street & Leonie Burgess, 2008. "Designing Discrete Choice Experiments: Do Optimal Designs Come at a Price?," Journal of Consumer Research, Oxford University Press, vol. 35(2), pages 360-375, 03.
  11. 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.
  12. Marisa J. Mazzotta & James J. Opaluch, 1995. "Decision Making When Choices Are Complex: A Test of Heiner's Hypothesis," Land Economics, University of Wisconsin Press, vol. 71(4), pages 500-515.
  13. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
  14. Ritov, Ilana & Baron, Jonathan, 1992. " Status-Quo and Omission Biases," Journal of Risk and Uncertainty, Springer, vol. 5(1), pages 49-61, February.
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