Hess, S. & Giergiczny, M. (2015)

Intra-respondent heterogeneity in a stated choice survey on wetland conservation in Belarus: first steps towards creating a link with uncertainty in contingent valuation.

Applications of discrete choice models in environmental valuation increasingly use a random coefficient specification, such as mixed logit, to represent taste heterogeneity. The majority of applications rely on data containing multiple observations for each respondent, where a common assumption is that tastes stay constant across choices for the same respondent. We question this assumption and make use of a model developed in the transport field which allows tastes to vary over choices for each consumer in addition to variation across consumers. An empirical analysis making use of a stated choice dataset for wetland conservation in Belarus shows that superior performance is obtained by allowing jointly for the two types of heterogeneity and that recovery of these intra-respondent variations is not possible using standard approaches, such as allowing for scale heterogeneity across tasks. We show also that intra-respondent heterogeneity can be especially high for attributes which respondents are unfamiliar with, and that a failure to account for it can substantially affect welfare estimates. We interpret this as an indication that this heterogeneity relates primarily to uncertainty. Finally, we offer initial insights into the relationship between intra-respondent heterogeneity and findings on uncertainty in a contingent valuation context.

Hess, S. & Giergiczny, M. (2015), Intra-respondent heterogeneity in a stated choice survey on wetland conservation in Belarus: first steps towards creating a link with uncertainty in contingent valuation. Environmental & Resource Economics, 60 (3), pp 327-347.