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Revealing the extent of process heterogeneity in choice analysis: An empirical assessment

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  • Puckett, Sean M.
  • Hensher, David A.

Abstract

Choice analysts increasingly use a mix of revealed preference and stated choice data paradigms to identify preferences of samples of individuals that are used to infer behavioural response and willingness to pay for specific attributes. These data are in a sense artificial constructs that are developed to approximate real choice settings of the way that individuals process relevant information in making choices. As such, all data designs formalized through a survey instrument seek information through questions that become descriptions of events and as such the probabilities of choice that are of interest are strictly probabilities attached to event descriptions and not choice probabilities of events per se. The recognition of this distinction, initially noted by Kahneman et al. [Kahneman, D., Slovic, P., Tversky, A., 1982. Judgement under uncertainty: Heuristics and biases. Cambridge University Press, New York], can be captured, at least in part, through the idea of process heterogeneity, as a way of recognizing and accounting for the many ways in which individuals process information, and in part is influenced by the way the analyst describes the context in which preference data is sought. Building on previous contributions on attribute processing, this paper draws on recent empirical evidence to further reinforce the importance of joint modelling of process and outcome in choice analysis. This study adds to the evidence of a trend emerging on the upward bias of mean estimates of marginal willingness to pay when ignoring process heterogeneity.

Suggested Citation

  • Puckett, Sean M. & Hensher, David A., 2009. "Revealing the extent of process heterogeneity in choice analysis: An empirical assessment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(2), pages 117-126, February.
  • Handle: RePEc:eee:transa:v:43:y:2009:i:2:p:117-126
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    References listed on IDEAS

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    1. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, December.
    2. David A. Hensher, 2008. "Joint Estimation of Process and Outcome in Choice Experiments and Implications for Willingness to Pay," Journal of Transport Economics and Policy, University of Bath, vol. 42(2), pages 297-322, May.
    3. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    4. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
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    Cited by:

    1. Kelvin Balcombe & Michail Bitzios & Iain Fraser & Janet Haddock-Fraser, 2014. "Using Attribute Importance Rankings Within Discrete Choice Experiments: An Application to Valuing Bread Attributes," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 446-462, June.
    2. Riccardo Scarpa & Mara Thiene & David A. Hensher, 2010. "Monitoring Choice Task Attribute Attendance in Nonmarket Valuation of Multiple Park Management Services: Does It Matter?," Land Economics, University of Wisconsin Press, vol. 86(4), pages 817-839.
    3. Nguyen, Thanh Cong & Robinson, Jackie & Whitty, Jennifer A. & Kaneko, Shinji & Nguyen, The Chinh, 2015. "Attribute non-attendance in discrete choice experiments: A case study in a developing country," Economic Analysis and Policy, Elsevier, vol. 47(C), pages 22-33.
    4. Caputo, Vincenzina & Nayga, M. Rodolfo Jr. & Sacchi, Giovanna & Scarpa, Riccardo, 2016. "Attribute non-attendance or attribute-level non-attendance? A choice experiment application on extra virgin olive oil," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236035, Agricultural and Applied Economics Association.
    5. Balbontin, Camila & Hensher, David A. & Collins, Andrew T., 2017. "Integrating attribute non-attendance and value learning with risk attitudes and perceptual conditioning," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 172-191.
    6. Alessandro Innocenti & Patrizia Lattarulo & Maria Grazia Pazienza, 2009. "Heuristics and Biases in Travel Mode Choice," Labsi Experimental Economics Laboratory University of Siena 027, University of Siena.
    7. Richard Yao & Riccardo Scarpa & John Rose & James Turner, 2015. "Experimental Design Criteria and Their Behavioural Efficiency: An Evaluation in the Field," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(3), pages 433-455, November.
    8. Vidal Vieira, José Geraldo & Fransoo, Jan C., 2015. "How logistics performance of freight operators is affected by urban freight distribution issues," Transport Policy, Elsevier, vol. 44(C), pages 37-47.
    9. Hoyos, David, 2010. "The state of the art of environmental valuation with discrete choice experiments," Ecological Economics, Elsevier, vol. 69(8), pages 1595-1603, June.
    10. Mara Thiene & Riccardo Scarpa & Jordan Louviere, 2015. "Addressing Preference Heterogeneity, Multiple Scales and Attribute Attendance with a Correlated Finite Mixing Model of Tap Water Choice," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(3), pages 637-656, November.
    11. Caputo, Vincenzina & Loo, Ellen J. Van & Scarpa, Riccardo & Nayga, Rodolfo M. Jr & Verbeke, Wim, 2014. "“Using Experiments to Address Attribute Non-attendance in Consumer Food Choices”," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 177173, Agricultural and Applied Economics Association.
    12. David Hensher & John Rose & William Greene, 2012. "Inferring attribute non-attendance from stated choice data: implications for willingness to pay estimates and a warning for stated choice experiment design," Transportation, Springer, vol. 39(2), pages 235-245, March.
    13. Bliemer, Michiel C.J. & Rose, John M., 2011. "Experimental design influences on stated choice outputs: An empirical study in air travel choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 63-79, January.
    14. Hoyos Ramos, David & Mariel Chladkova, Petr & Meyerhoff, Jürgen, 2010. "Comparing the performance of different approaches to deal with attribute non-attendance in discrete choice experiments: a simulation experiment," BILTOKI 2010-01, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
    15. Sanko, Nobuhiro & Yamamoto, Toshiyuki, 2013. "Estimation efficiency of RP/SP models considering SP design and error structures," Journal of choice modelling, Elsevier, vol. 6(C), pages 60-73.
    16. Mesa-Arango, Rodrigo & Ukkusuri, Satish V., 2014. "Attributes driving the selection of trucking services and the quantification of the shipper’s willingness to pay," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 142-158.

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