Revealing Differences in Willingness to Pay due to the Dimensionality of Stated Choice Designs: An Initial Assessment

Abstract

Stated choice (SC) methods are now a widely accepted data paradigm in the study of behavioural response of agents (be they individuals, households, or other organizations). Their popularity since the pioneering contributions of Louviere and Woodworth (1983) and Louviere and Hensher (1983) has spawned an industry of applications in fields as diverse as transportation, environmental science, health economics and policy, marketing, political science and econometrics. With rare exception, empirical studies have used a single SC design, in which the numbers of attributes, alternatives, choice sets, attribute levels and ranges have been fixed across the entire design. As a consequence the opportunity to investigate the influence of design dimensionality on behavioural response has been denied. Accumulated wisdom has promoted a large number of positions on what design features are specifically challenging for respondents (eg the number of choice sets to evaluate); and although a number of studies have assessed the influence of subsets of design dimensions (eg varying the range of attribute levels), there exists no single study (that we are aware of) that has systematically varied all of the main dimensions of SC experiments. This paper reports the findings of a study that uses a Design of Designs (DoD) SC experiment in which the ‘attributes’ of the design are the design dimensions themselves including the attributes of each alternative in a choice set. The design dimensions that are varied are the number of choice sets presented, the number of alternatives in each choice set, the number of attributes per alternative, the number of levels of each attribute and the range of attribute levels. This paper details the designs and how they are used in the search for design impacts on willingness to pay (ie attribute valuation), using a sample of respondents in Sydney choosing amongst trip attribute bundles for their commuting trip.