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Are choice experiments reliable? Evidence from the lab

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  • Luchini, S.
  • Watson, V.
Abstract
This study investigates whether a popular stated preference method, the choice experiment (CE), reliably measures individuals’ values for a good. We address this question using an induced value experiment. Our results indicate that CEs fail to elicit payoff maximizing choices. We find little evidence that increasing the salience of the choices or adding monetary incentives increase the proportion of payoff maximizing choices. This questions the increasing use of CE to value non-market goods for policy making.

Suggested Citation

  • Luchini, S. & Watson, V., 2014. "Are choice experiments reliable? Evidence from the lab," Economics Letters, Elsevier, vol. 124(1), pages 9-13.
    • Handle: RePEc:eee:ecolet:v:124:y:2014:i:1:p:9-13
    DOI: 10.1016/j.econlet.2014.04.005
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    7. Jayson L. Lusk & Ted C. Schroeder, 2004. "Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
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    Cited by:

    1. Claudia Bazzani & Marco A. Palma & Rodolfo M. Nayga, 2018. "On the use of flexible mixing distributions in WTP space: an induced value choice experiment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(2), pages 185-198, April.
    2. Chavez, Daniel E. & Palma, Marco A. & Nayga, Rodolfo M. & Mjelde, James W., 2020. "Product availability in discrete choice experiments with private goods," Journal of choice modelling, Elsevier, vol. 36(C).
    3. Chavez, Daniel E. & Palma, Marco A. & Nayga Jr., Rodolfo M., 2017. "When does real become consequential in non-hypothetical choice experiments?," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266327, Southern Agricultural Economics Association.
    4. Nicolas Jacquemet & Stéphane Luchini & Jason F. Shogren & Verity Watson, 2019. "Discrete Choice under Oaths," Documents de travail du Centre d'Economie de la Sorbonne 19007, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    5. Patrick Lloyd-Smith & Ewa Zawojska & Wiktor Adamowicz, 2020. "Moving beyond the Contingent Valuation versus Choice Experiment Debate: Presentation Effects in Stated Preference," Land Economics, University of Wisconsin Press, vol. 96(1), pages 1-24.
    6. Milad Haghani & Michiel C. J. Bliemer & John M. Rose & Harmen Oppewal & Emily Lancsar, 2021. "Hypothetical bias in stated choice experiments: Part I. Integrative synthesis of empirical evidence and conceptualisation of external validity," Papers 2102.02940, arXiv.org.
    7. Nicolas Jacquemet & Stephane Luchini & Jason Shogren & Verity Watson, 2019. "Discrete Choice under Oaths," Working Papers halshs-02136103, HAL.
    8. Haghani, Milad & Bliemer, Michiel C.J. & Rose, John M. & Oppewal, Harmen & Lancsar, Emily, 2021. "Hypothetical bias in stated choice experiments: Part I. Macro-scale analysis of literature and integrative synthesis of empirical evidence from applied economics, experimental psychology and neuroimag," Journal of choice modelling, Elsevier, vol. 41(C).
    9. Cerroni, S. & Watson, V. & Macdiarmid, J., 2018. "Preferences for healthy and environmentally sustainable food: Combining induced-value and home-grown experiments," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277155, International Association of Agricultural Economists.
    10. Werbeck, Anna, 2024. "Stated preferences and actual choices in german health insurance," Ruhr Economic Papers 1091, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    11. Bazzani, Claudia & Nayga, Rodolfo M. Jr. & Caputo, Vincenzina & Canavari, Maurizio & Danforth, Diana M., 2016. "On the Use of the BDM Mechanism in Non-Hypothetical Choice Experiments," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235904, Agricultural and Applied Economics Association.
    12. Toma, Mattie & Bell, Elizabeth, 2024. "Understanding and increasing policymakers’ sensitivity to program impact," Journal of Public Economics, Elsevier, vol. 234(C).
    13. Xuan Wei & Hayk Khachatryan & Alicia Rihn, 2021. "Estimating willingness-to-pay for neonicotinoid-free plants: Incorporating pro-environmental behavior in hypothetical and non-hypothetical experiments," PLOS ONE, Public Library of Science, vol. 16(5), pages 1-20, May.
    14. Regier, Dean A. & Sicsic, Jonathan & Watson, Verity, 2019. "Choice certainty and deliberative thinking in discrete choice experiments. A theoretical and empirical investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 235-255.
    15. Botero, Hernan & Barnes, Andrew P. & Perez, Lisset & Rios, David & Ramirez-Villegas, Julian, 2021. "The determinants of common bean variety selection and diversification in Colombia," Ecological Economics, Elsevier, vol. 190(C).
    16. Keith Finlay & Charles Stoecker & Scott Cunningham, 2015. "Willingness-To-Accept Pharmaceutical Retail Inconvenience: Evidence from a Contingent Choice Experiment," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-10, May.
    17. Meginnis, Keila & Burton, Michael & Chan, Ron & Rigby, Dan, 2021. "Strategic bias in discrete choice experiments," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    18. Pierre-Alexandre Mahieu & Henrik Andersson & Olivier Beaumais & Romain Crastes & François-Charles Wolff, 2014. "Is Choice Experiment Becoming more Popular than Contingent Valuation? A Systematic Review in Agriculture, Environment and Health," Working Papers 2014.12, FAERE - French Association of Environmental and Resource Economists.

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    More about this item

    Keywords

    Experimental economics; Choice experiment; Demand revelation;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics

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