Accounting for respondent’s preference uncertainty in choice experiments

ABSTRACT

Preference uncertainty is an important aspect affecting respondents’ choices and attribute valuation. However, elicitation of preference uncertainty and its modelling is strongly restricted within choice experiments. This paper applies modelling techniques to account for the preference uncertainty data to evaluate road traffic noise. The paper argues that modelling the preference uncertainty data to examine the error structure can shed significant light on the potential causes of preference uncertainty. The results also reveal that accounting for preference uncertainty data within modelling can have important implications for the valuation exercise. It is found that the nested logit model can examine significant correlation between similar preference certainty levels arising from choice-set characteristics while the error components logit model can be used to examine the effect of inherent respondent uncertainty and stochastic factors on preference uncertainty. The paper therefore recommends treating and accounting for preference uncertainty within choice experiments and thereby examine its impact on any subsequent valuations.

KEYWORDS:

• Preference uncertainty
• road traffic noise
• environmental valuation
• nested logit
• error components logit

Acknowledgements

The paper is dedicated to Dr Jeremy Toner who left for the eternal spiritual abode during the final stages of the preparation of this manuscript. Jeremy always provided insightful guidance and was full of wit. Although a self-realized soul may live in various material bodies while in this world, experiencing their various qualities and functions, he is never entangled, just as the wind which carries various aromas does not actually mix with them (Srimad Bhagavatam 11.7.41). Jeremy will always be dearly missed.

Disclosure statement

No actual or potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Marie Curie EST Fellowship.