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Lexicographic / discontinuous choices

Lexicographic / discontinuous choices. Lexicographic choices. Respondents base their choice on a subset of the presented attributes Continuity axiom is violated = no trade-off between the attributes Biased welfare estimates. Sources. Choice heuristics (choice set complexity)

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Lexicographic / discontinuous choices

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  1. Lexicographic / discontinuous choices

  2. Lexicographic choices • Respondents base their choice on a subset of the presented attributes • Continuity axiom is violated = no trade-off between the attributes • Biased welfare estimates

  3. Sources • Choice heuristics (choice set complexity) • Protest responses (paying for env, pay vehicle) • Design issues (causal att, levels) • True preferences

  4. Some empirical work • Hensher, Rose and Greene, 2005 • Campbell, Hutchinson and Scarpa, 2007 • Carlsson, Kataria and Lampi, 2008

  5. Hensher et al. (2005) “The implications on willingness to pay of respondents ignoring specific attributes” • Study = car commuters in Sydney • Model = Mixed logit model with individual specific coefficients • Coefficients are restricted to zero if the respondent ignored that attribute • Results = restricted model leads to 18-62% higher value of time

  6. Campbell et al. (2007) “Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments” • Study = rural environmental landscapes in Ireland • Model = ECM allowing for differences in scale and error variance between subsets of respondents. • Also weighting of attributes • Findings: • Error variance in discontinuous subset is significantly higher • Scaling and weighting leads to lower WTP estimates

  7. Carlsson et al. (2008) “Ignoring attributes in choice experiments” • Study = three environmental objectives in Sweden • Model = RPL with parameters restricted to 0 if ignored • Three assumptions in estimating WTP: • All respondents positive WTP • Ignoring env attribute zero WTP • Ignoring costs and env attribute zero WTP • Findings: • No systematic differences between restr and unrestr model • Only significant differences in WTP if assumed that ignoring attribute means zero WTP

  8. CM challenges • Survey design? • Complexity • Follow-up questions • Reasons for choice behaviour? • Choice heuristics • True zero WTP • Analysis? • Econometric models • Respondents who ignore cost attribute

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