Abstract
Analysts are increasingly making use of pivot style Stated Choice (SC) data in the estimation of choice models. These datasets often contain a reference alternative whose attributes remain invariant across replications for the same respondent. This paper presents evidence to suggest that respondents react differently to the attributes of these reference alternatives and those of purely hypothetical alternatives. While some such evidence has been reported in the existing literature, this paper goes further and details a number of different departures from a common treatment of the two types of alternatives, relating both to the observed part of utility and the error term.
Similar content being viewed by others
References
Adamowicz W, Louviere JJ, Williams M (1994) Combining stated and revealed preference methods for valuing environmental attributes. J Environ Econ Manag 26: 271–292
Armstrong P, Garrido RA, de D Ortúzar J (2001) Confidence interval to bound the value of time. Transp Res E: Logist Transp Rev 37(1): 143–161
Bhat CR (1995) A heteroscedastic extreme value model of intercity travel mode choice. Transp Res B: Methodol 29(6): 471–483
Bierlaire M (2003) BIOGEME: a free package for the estimation of discrete choice models. In: Proceedings of the 3rd Swiss transport research conference. Monte Verità, Ascona
Bliemer MCJ, Rose JM (2006) Designing stated choice experiments: state-of-the-art. In: Paper presented at the 11th international conference on travel behaviour research. Kyoto, Japan
Bockstael NE, McConnell KE, Strand IE (1991) Recreation. In: Braden JB, Kolstad CD (eds) Measuring the demand for environmental quality. North Holland, Amsterdam
Bockstael NE, Strand IE, Hanemann WM (1987) Time and the recreational demand model. Am J Agric Econ 69: 293–302
Camerer CF, Hogarth RM (1999) The effects of financial incentives in experiments: a review and capital-labor-production framework. J Risk Uncertain 19(1–3): 7–42
Campbell D, Hutchinson WG, Scarpa R (2008) Incorporating discontinuous preferences into the analysis of discrete choice experiments. Environ Resour Econ (forthcoming)
Diamond PA, Hausman JA (1994) Contingent valuation: is some number better than no number. J Econ Perspect 8(4): 45–64
Ding M (2007) An incentive aligned mechanism for conjoint analysis. J Mark Res XLIV: 214–223
Doornik JA (2001) Ox: an object-oriented matrix language. Timberlake Consultants Press, London
Econometric Software (2007) Nlogit 4.0. Econometric Software, New York
Ferrini S, Scarpa R (2007) Designs with a-priori information for nonmarket valuation with choice-experiments: a Monte Carlo study. J Environ Econ Manag 53: 342–363
Gilboa I, Schmeidler D, Wakker P (2002) Utility in case-based decision theory. J Econ Theory 105: 483–502
Greene WH, Hensher DA, Rose JM (2005) Using classical simulation based estimators to estimate individual willingness to pay values: a mixed logit case study of commuters. In: Scarpa R, Alberini A (eds) Applications of simulation methods in environmental and resource economics. Springer, Dordrecht, pp 17–34
Hensher DA (2004) Accounting for stated choice design dimensionality in willingness to pay for travel time savings. J Transp Econ Policy 38(2): 425–446
Hensher DA (2006) How do respondents handle stated choice experiments? Attribute processing strategies under varying information load. J Appl Econom 21: 861–878
Hensher DA (2007) Joint estimation of process and outcome in choice experiments and implications for willingness to pay. J Transp Econ Policy (forthcoming)
Hensher DA, Greene WH (2003) The mixed logit model: the state of practice. Transportation 30(2): 133–176
Hensher DA, Rose JM (2007) Development of commuter and non-commuter mode choice models for the assessment of new public transport infrastructure projects: a case study. Transp Res A: Policy Pract 41(5): 428–443
Hess S, Rose JM (2007) Intra-respondent taste heterogeneity in instantaneous panel surveys. In: Paper to be presented at the 11th triennial WCTR conference July 2007. Berkeley, CA
Hess S, Rose JM, Hensher DA (2008) Asymmetrical preference formation in willingness to pay estimates in discrete choice models. Transp Res E: Logist Transp Rev 44(5): 847–863
Kahnemann D, Tversky A (1979) Prospect theory: an analysis of decisions under risk. Econometrica 47(2): 263–291
Kontoleon A, Yabe M (2003) Assessing the impacts of alternative ‘opt-out’ formats in choice experiment studies: consumer preferences for genetically modified content and production information in food. J Agric Policy Resour 5: 1–43
Layton DF (2000) Random coefficient models for stated preference surveys. J Environ Econ Manag 40(1): 20–36
Lehtonen E, Kuuluvainen J, Pouta E, Rekola M, Li CZ (2003) Non-market benefits of forest conservation in southern Finland. Environ Social Policy 6: 195–204
List JA (2001) Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards. Am Econ Rev 91(5): 1498–1507
Louviere JJ, Hensher DA, Swait J (2000) Stated choice models: analysis and application. Cambridge University Press, Cambridge
Luce R (1959) Individual choice behavior: a theoretical analysis. Wiley, New York
McFadden D (1974) Conditional logit analysis of qualitative choice behaviour. In: Zarembka P (eds) Frontiers in econometrics. Academic Press, New York, pp 105–142
McFadden D (1978) Modelling the choice of residential location. In: Karlqvist A, Lundqvist L, Snickars F, Weibull JW (eds) Spatial interaction theory and planning models, chap 25. North Holland, Amsterdam, pp 75–96
Mogas J, Rierab P, Bennett J (2006) A comparison of contingent valuation and choice modelling with second-order interactions. J For Econ 15: 5–30
Rose JM, Bliemer MCJ, Hensher DA, Collins AC (2008) Designing efficient stated choice experiments involving respondent based reference alternatives. Transp Res B: Methodol (forthcoming)
Rousseas SW, Hart AG (1951) Experimental verification of a composite indifference map. J Polit Econ 59: 288–318
Scarpa R, Campbell D, Hutchinson WG (2007) Benefit estimates for landscape improvements: sequential bayesian design and respondents’ rationality in a choice experiment. Land Econ 83(4): 617–634
Scarpa R, Ferrini S, Willis KG (2005) Performance of error component models for status-quo effects in choice experiments. In: Scarpa R, Alberini A (eds) Applications of simulation methods in environmental and resource economics. Springer, Dordrecht
Scarpa R, Willis KG, Acutt M (2007) Valuing externalities from water supply: status quo, choice complexity and individual random effects in panel kernel logit analysis of choice experiments. J Environ Plan Manag 50(4): 449–466
Starmer C (2000) Developments in non-expected utility theory: the hunt for a descriptive theory of choice under risk. J Econ Lit XXXVIII: 332–382
Thurstone L (1931) The indifference function. J Social Psychol 2: 139–167
Train K (2003) Discrete choice methods with simulation. Cambridge University Press, Cambridge
Train K, Wilson WW (2007) Estimation on stated-preference experiments constructed from revealed-preference choices. Transp Res B: Methodol (forthcoming)
Walker J (2001) Extended discrete choice models: integrated framework, flexible error structures, and latent variables. PhD thesis, MIT, Cambridge, MA
Wallis WA, Friedman M (1942) The empirical derivation of indifference functions. In: Lange O, McIntyre F, Yntema TO (eds) Studies in mathematical economics and econometrics in memory of Henry Schultz. University of Chicago Press, Chicago, pp 175–189
Willis KG, Scarpa R, Acutt M (2005) Accessing water company customer preferences and willingness to pay for service improvements: a stated choice analysis. Water Resour Res 41: 1–11
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Hess, S., Rose, J.M. Should Reference Alternatives in Pivot Design SC Surveys be Treated Differently?. Environ Resource Econ 42, 297–317 (2009). https://doi.org/10.1007/s10640-008-9244-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10640-008-9244-6