Rationalising the 'irrational': a think aloud study of discrete choice experiment responses
Stated preference methods assume respondents' preferences are consistent with utility theory, but many empirical studies report evidence of preferences that violate utility theory. This evidence is often derived from quantitative tests that occur naturally within, or are added to, stated preference tasks. In this study, we use qualitative methods to explore three axioms of utility theory: completeness, monotonicity, and continuity. We take a novel approach, adopting a 'think aloud' technique to identify violations of the axioms of utility theory and to consider how well the quantitative tests incorporated within a discrete choice experiment are able to detect these. Results indicate that quantitative tests classify respondents as being 'irrational' when qualitative statements would indicate they are 'rational'. In particular, 'non-monotonic' responses can often be explained by respondents inferring additional information beyond what is presented in the task, and individuals who appear to adopt non-compensatory decision-making strategies do so because they rate particular attributes very highly (they are not attempting to simplify the task). The results also provide evidence of 'cost-based responses': respondents assumed tests with higher costs would be of higher quality. The value of including in-depth qualitative validation techniques in the development of stated preference tasks is shown. Copyright © 2008 John Wiley & Sons, Ltd.
Volume (Year): 18 (2009)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul McNamee & Sharon Glendinning & Jonathan Shenfine & Nick Steen & S. Griffin & John Bond, 2004. "Chained time trade-off and standard gamble methods," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(1), pages 81-86, February.
- Ryan, Mandy & Scott, David A. & Donaldson, Cam, 2004. "Valuing health care using willingness to pay: a comparison of the payment card and dichotomous choice methods," Journal of Health Economics, Elsevier, vol. 23(2), pages 237-258, March.
- Rachel Baker & Angela Robinson, 2004. "Responses to standard gambles: are preferences 'well constructed'?," Health Economics, John Wiley & Sons, Ltd., vol. 13(1), pages 37-48.
- Matthew Rabin, 1998.
"Psychology and Economics,"
Journal of Economic Literature,
American Economic Association, vol. 36(1), pages 11-46, March.
- Rabin, Matthew, 1997. "Psychology and Economics," Department of Economics, Working Paper Series qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Matthew Rabin., 1997. "Psychology and Economics," Economics Working Papers 97-251, University of California at Berkeley.
- Hall, Jane & Viney, Rosalie & Haas, Marion & Louviere, Jordan, 2004. "Using stated preference discrete choice modeling to evaluate health care programs," Journal of Business Research, Elsevier, vol. 57(9), pages 1026-1032, September.
- Joanna Coast, 1999. "The appropriate uses of qualitative methods in health economics," Health Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 345-353.
- Cam Donaldson & Phil Shackley & Mona Abdalla, 1997. "Using Willingness To Pay To Value Close Substitutes: Carrier Screening for Cystic Fibrosis Revisited," Health Economics, John Wiley & Sons, Ltd., vol. 6(2), pages 145-159.
- Emily Lancsar & Jordan Louviere, 2006. "Deleting 'irrational' responses from discrete choice experiments: a case of investigating or imposing preferences?," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 797-811.
- Nick Hanley & Robert Wright & Gary Koop, 2002. "Modelling Recreation Demand Using Choice Experiments: Climbing in Scotland," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(3), pages 449-466, July.
- McFadden, Daniel, 1999.
"Rationality for Economists?,"
Journal of Risk and Uncertainty,
Springer, vol. 19(1-3), pages 73-105, December.
- Mandy Ryan & Angela Bate, 2001. "Testing the assumptions of rationality, continuity and symmetry when applying discrete choice experiments in health care," Applied Economics Letters, Taylor & Francis Journals, vol. 8(1), pages 59-63.
- Scott, Anthony & Watson, M. Stuart & Ross, Sue, 2003. "Eliciting preferences of the community for out of hours care provided by general practitioners: a stated preference discrete choice experiment," Social Science & Medicine, Elsevier, vol. 56(4), pages 803-814, February.
- Cairns, John & van der Pol, Marjon, 2004. "Repeated follow-up as a method for reducing non-trading behaviour in discrete choice experiments," Social Science & Medicine, Elsevier, vol. 58(11), pages 2211-2218, June.
- Ryan, Mandy & San Miguel, Fernando, 2000. "Testing for consistency in willingness to pay experiments," Journal of Economic Psychology, Elsevier, vol. 21(3), pages 305-317, June.
- Shiell, Alan & Rush, Bonnie, 2003. "Can willingness to pay capture the value of altruism? An exploration of Sen's notion of commitment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(6), pages 647-660, December.
- Mandy Ryan & Fernando San Miguel, 2003. "Revisiting the axiom of completeness in health care," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 295-307.
- McIntosh, E. & Ryan, M., 2002. "Using discrete choice experiments to derive welfare estimates for the provision of elective surgery: Implications of discontinuous preferences," Journal of Economic Psychology, Elsevier, vol. 23(3), pages 367-382, June.
- Colin F. Camerer, 1997. "Progress in Behavioral Game Theory," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 167-188, Fall.
- Payne, John W & Bettman, James R & Schkade, David A, 1999. "Measuring Constructed Preferences: Towards a Building Code," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 243-70, December.
- Dolan, P. & Gudex, C. & Kind, P. & Williams, A., 1996. "Valuing health states: A comparison of methods," Journal of Health Economics, Elsevier, vol. 15(2), pages 209-231, April.
- Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, Junio.
- Schkade David A. & Payne John W., 1994. "How People Respond to Contingent Valuation Questions: A Verbal Protocol Analysis of Willingness to Pay for an Environmental Regulation," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 88-109, January.
- Araña, Jorge E. & León, Carmelo J. & Hanemann, Michael W., 2008. "Emotions and decision rules in discrete choice experiments for valuing health care programmes for the elderly," Journal of Health Economics, Elsevier, vol. 27(3), pages 753-769, May.
- Fernando San Miguel & Mandy Ryan & Mabelle Amaya-Amaya, 2005. "'Irrational' stated preferences: a quantitative and qualitative investigation," Health Economics, John Wiley & Sons, Ltd., vol. 14(3), pages 307-322.
- Shiell, Alan & Gold, Lisa, 2002. "Contingent valuation in health care and the persistence of embedding effects without the warm glow," Journal of Economic Psychology, Elsevier, vol. 23(2), pages 251-262, April.
- Dolan, Paul & Kind, Paul, 1996. "Inconsistency and health state valuations," Social Science & Medicine, Elsevier, vol. 42(4), pages 609-615, February.
When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:18:y:2009:i:3:p:321-336. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.