Cheap and expensive alternatives in stated choice experiments: are they equally considered by respondents?

Citation

Campbell D, Aravena CD & Hutchinson WG (2011) Cheap and expensive alternatives in stated choice experiments: are they equally considered by respondents?. Applied Economics Letters, 18 (8), pp. 743-747. https://doi.org/10.1080/13504851.2010.498341

Abstract
When analysing choice experiments respondents are assumed to attend all attributes and alternatives in the same way. However, because of the important role that the price of the alternatives can play in the decision-making process, the level of price of a specific alternative may have consequences on the level of consideration given to the remaining attributes of the alternative. In this article, we propose the use of a discrete mixtures logit approach to accommodate respondents ignoring alternatives in stated choice experiments. Our results indicate a higher propensity for respondents to ignore attributes when they face cheap rather than expensive alternatives. We also find that allowing for this leads to substantial improvements in the model performance.

Journal
Applied Economics Letters: Volume 18, Issue 8

People

Professor Danny Campbell

Professor, Economics