Preference uncertainty in stated preference studies: facts and artefacts

Abstract

The ordinal scale and polychotomous choice methods are two widely used techniques for estimating preference uncertainty in stated preference studies. This article presents the results of two experiments that apply these estimation techniques. The first experiment was designed to compare and contrast the scores of the ordinal scale and polychotomous choice method. The second experiment was conducted to test a scale that combines verbal expressions with numerical and graphical interpretations: a composite scale. The results of the study can be summarized in three key findings. First, the polychotomous choice method generates a higher proportion of ‘yes’ responses than the conventional dichotomous choice elicitation format. Second, the composite scale generates a significantly higher proportion of certain responses. Finally, the ordinal scale performs poorly on the ground of construct validity.

Keywords:

• preference uncertainty
• contingent valuation
• ordinal scale
• polychotomous choice method
• climate change

JEL Classification::

• Q51
• Q54

Notes

¹ The health risk communication literature suggests that pictures accompanied by clear text help communication through higher attention, comprehension, recall and adherence by respondents (Houts et al., 2006).

² More detailed description of the questionnaire, survey and the WTP results are available in Akter and Bennett (2011). The questionnaire can be obtained from the corresponding author.

³ The convolution based Poe et al. (1994) test was used to test statistical differences between mean WTP estimates.

⁴ This was obtained by recoding ‘maybe yes’, ‘probably yes’ and ‘definitely yes’ responses to ‘yes’ and the rest as ‘no’.