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

Listed author(s):
  • 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)

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.

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File URL: http://www.wne.uw.edu.pl/index.php/download_file/1935/
File Function: First version, 2015
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Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2015-31.

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Length: 44 pages
Date of creation: 2015
Handle: RePEc:war:wpaper:2015-31
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