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

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  • Czajkowski, Mikołaj
  • Vossler, Christian A.
  • Budziński, Wiktor
  • Wiśniewska, Aleksandra
  • Zawojska, Ewa

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 a discrete choice model of stated preferences. Planned use of a resource, which can also be considered a latent variable, is frequently an important consideration when modelling stated preferences for a change in a good, and we demonstrate how our framework can be used to incorporate this information simultaneously. We further explore whether simple information treatments, which vary the degree to which the potential role of surveys in informing policy is emphasized, can influence respondent beliefs. Our results suggest that latent beliefs over consequentiality, resource use and, to a much lesser extent, the information treatments significantly influence elicited willingness to pay.

Suggested Citation

  • Czajkowski, Mikołaj & Vossler, Christian A. & Budziński, Wiktor & Wiśniewska, Aleksandra & Zawojska, Ewa, 2017. "Addressing empirical challenges related to the incentive compatibility of stated preferences methods," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 47-63.
  • Handle: RePEc:eee:jeborg:v:142:y:2017:i:c:p:47-63
    DOI: 10.1016/j.jebo.2017.07.023
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    Cited by:

    1. Ewa Zawojska & Anna Bartczak & Mikołaj Czajkowski, 2018. "Disentangling the effects of policy and payment consequentiality and risk attitudes on stated preferences," Working Papers 2018-01, Faculty of Economic Sciences, University of Warsaw.
    2. Nick Hanley & Mikołaj Czajkowski, 2017. "Stated Preference valuation methods: an evolving tool for understanding choices and informing policy," Working Papers 2017-01, Faculty of Economic Sciences, University of Warsaw.
    3. Michela Faccioli & Mikołaj Czajkowski & Klaus Glenk & Julia Martin-Ortega, 2018. "Environmental attitudes and place identity as simultaneous determinants of preferences for environmental goods," Working Papers 2018-08, Faculty of Economic Sciences, University of Warsaw.
    4. Drichoutis, Andreas C. & Lusk, Jayson L. & Pappa, Valentina, 2016. "Elicitation formats and the WTA/WTP gap: A study of climate neutral foods," Food Policy, Elsevier, vol. 61(C), pages 141-155.

    More about this item

    Keywords

    Discrete choice experiment; Stated preferences; Consequentiality; Field experiment; Hybrid mixed logit model;

    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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