The use of the cut-offs methodology to identify inconsistent answers in discrete choice models

Sergio Colombo, Nick Hanley, Glenn Bush

Abstract

In the choice experiment method respondents are typically assumed to hold a perfectly rational selection rule. However, individuals may use other selection rules when choosing the preferred alternative to simplify the choice. In this paper, we make use of the “cutoffs” model to as a way of handling the non-compensatory nature of choices. Furthermore, we extend it to allow consideration of inconsistencies in choice in stated preference choice data. We find that this allows a better fitting model to be estimated, and that it produces considerable effects on the implied willingness to pay.


Keywords

Choice experiment; Choice inconsistency; Cut-offs

Subject classification

Q5, D01.

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References

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