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Rationalising the 'irrational'

Rationalising the 'irrational' : A think aloud study of discrete choice experiment responses

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Authors

  • Mandy Ryan
  • Verity Watson
  • Vikki Entwistle

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Info

Original languageEnglish
Pages321-336
Number of pages16
JournalHealth Economics
Journal publication dateMar 2009
Journal number3
Volume18
DOIs
StatePublished

Abstract

Stated preference methods assume respondents' preferences are consistent with utility theory, but many empirical Studies report evidence of preferences that violate utility theory. This evidence is often derived from quantitative tests that Occur naturally within, or are added to, stated preference tasks. In this study, we use qualitative methods to explore three axioms Of utility theory: completeness, monotonicity, and continuity. We take a novel approach, adopting a 'think aloud' technique to identify violations of the axioms Of utility theory and to consider how well the quantitative tests incorporated within a discrete choice experiment are able to detect these. Results indicate that quantitative tests classify respondents as being 'irrational' when qualitative statements would indicate they are rational'. In particular, 'non-nionotonic' responses can often be explained by respondents inferring additional information beyond what is presented in the task, and individuals who appear to adopt non-compensatory decision-making strategies do so because they rate particular attributes very highly (they are not attempting to simplify the task). The results also provide evidence of 'cost-based responses': respondents assumed tests with higher costs would be of higher quality. The value of including in-depth qualitative validation techniques in the development of stated preference tasks is shown. Copyright (C) 2008 John Wiley & Sons, Ltd.

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