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Modelling heterogeneity in response behaviour towards a sequence of discrete choice questions: a latent class approach

CollectionsANU College of Asia & the Pacific
Title: Modelling heterogeneity in response behaviour towards a sequence of discrete choice questions: a latent class approach
Author(s): McNair, Benjamin
Hensher, David
Bennett, Jeff
Keywords: choice experiment
latent class
ordering effects
strategic response
willingness-to-pay
Date published: 2010
Publisher: Canberra, ACT: Environmental Management and Development Programme, Asia Pacific School of Economics and Government, Australian National University
Citation: McNair, B., Hensher, D.A. & Bennett, J. (2010). Modelling heterogeneity in response behaviour towards a sequence of discrete choice questions: a latent class approach. Environmental Management & Development Occasional Paper 16. Canberra, ACT: Crawford School of Economics and Government, The Australian National University.
Description: 
There is a growing body of evidence in the non-market valuation literature suggesting that responses to a sequence of discrete choice questions tend to violate the assumptions typically made by analysts regarding independence of responses and stability of preferences. Heuristics such as value learning and strategic misrepresentation have been offered as explanations for these results. While a few studies have tested these heuristics as competing hypotheses, none have investigated the possibility that each explains the response behaviour of a subgroup of the population. In this paper, we make a contribution towards addressing this research gap by presenting an equality-constrained latent class model designed to estimate the proportion of respondents employing each of the proposed heuristics. We demonstrate the model on binary and multinomial choice data sources and find three distinct types of response behaviour. The results suggest that accounting for heterogeneity in response behaviour may be a better way forward than attempting to identify a single heuristic to explain the behaviour of all respondents.
URI: http://hdl.handle.net/10440/1114
http://digitalcollections.anu.edu.au/handle/10440/1114
ISSN: 1447-6975

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