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) Protest responses (paying for env, pay

vehicle) Design issues (causal att, levels) True preferences

Some empirical work

Hensher, Rose and Greene, 2005

Campbell, Hutchinson and Scarpa, 2007

Carlsson, Kataria and Lampi, 2008

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

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

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

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