Analysis of choice inconsistencies in on-line choice experiments: impact on welfare measures
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Individuals answering to choice experiments (CEs) are assumed to behave in concordance with standard utility theory. However, empirical evidence finds that these assumptions are frequently violated, impacting on willingness to pay(WTP) estimates. Because the cost attribute plays a key role in CEs used for environmental valuation, this study focuses on the impact of inconsistent choices with respect to cost on WTP, drawing on data from a survey aimed at valuing the environmental and social impacts of organic farming in mountainous olive orchards. An iterative process is used to identify inconsistent choices. Results provide sufficient evidence to suggest that inconsistencies can considerably bias WTP estimates. We propose that identifying and considering inconsistent choices enhances realism and accuracy of the conclusions drawn from CEs in environmental valuation.
Journal Title/Title of Proceedings
European Review of Agricultural Economics
Copyright © Oxford University Press and Foundation for the European Review of Agricultural Economics 2015; all rights reserved. This is a pre-copyedited, author-produced PDF of an article accepted for publication in European Review of Agricultural Economics following peer review. The version of record is available online at: http://dx.doi.org/10.1093/erae/jbv016.