Dr. Marek Giergiczny- External Tests of Scope in Choice Experiments

Marek Giergiczny, Assistant professor, Department of Economic Sciences, University of Warsaw.

External Tests of Scope in Choice Experiments.

22 March 2018, 11:00 to 12:00.
Business School Maurice Keyworth SR (1.06), University of Leeds.

Abstract:
Despite the growing popularity of Choice Experiments (CE), the number of studies which tested CE reliability is very limited. This is an important gap, as there is overwhelming evidence from behavioural economics, which shows that stated preferences, especially in the context of valuing public goods, may be subject to numerous cognitive biases. One of this phenomena is insensitivity to scope which implies that the value placed on a resource is virtually independent of a scale of the resource. Contingent valuation has been subject to important criticism due to insensitivity to scope. However, this effect hasn’t been extensively tested in non-market CE applications. The robust result in CE applications is that people are sensitive to the presented ranges (to both cost levels, and non-price attribute levels). In this work, using three different datasets collected in different context (valuation of urban amenities, entrance ticket to national park and value of time), we demonstrate that CE face similar problems as contingent valuation. In all three datasets we observe estimates to be internally but not externally consistent. The obtained results indicate that to large extent people perceive the presented levels in relative rather than absolute terms. We demonstrate that the obtained WTP measures depend on arbitrarily chosen levels.

About Marek:
Marek Giergiczny Ph.D. is an assistant professor at the University of Warsaw, Faculty of Economic Sciences, and a researcher at the Warsaw Ecological Economics Centre. His research interests include environmental and resource economics and discrete choice. models.