The Information Content of a Stated Choice Experiment: A New Method and its Application to the Value of a Statistical Life

Tinbergen Institute Discussion Paper No. TI 08-053/3

35 Pages Posted: 23 May 2008

See all articles by Jan Rouwendal

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Arianne

LEI (Agricultural Economics Research Institute)

Piet Rietveld

VU University Amsterdam - Department of Spatial Economics (Deceased)

Erik T. Verhoef

VU University Amsterdam - Department of Spatial Economics; Vrije Universiteit Amsterdam, School of Business and Economics; Tinbergen Institute

Date Written: May 16, 2008

Abstract

This paper presents a method to assess the distribution of values of time, and values of statistical life, over participants to a stated choice experiment, that does not require the researcher to make an a priori assumption on the type of distribution, as is required for example for mixed logit models. The method requires a few assumptions to hold true, namely that the valuations to be determined are constant for each individual, and that respondents make choices according to their preferences. These assumptions allow the derivation of lower and upper bounds on the (cumulative) distribution of the values of interest over respondents, by deriving for each choice set the value(s) for which the respondent would be indifferent between the alternatives offered, and next deriving from the choice actually made the respondent's implied minimum or maximum value(s). We also provide an extension of the method that incorporates the possibility that errors are made. The method is illustrated using data from an experiment investigating the value of time and the value of statistical life. We discuss the possibility to improve the information content of stated choice experiments by optimizing the attribute levels shown to respondents, which is especially relevant because it would help in selecting the appropriate distribution for mixed logit estimates for the same data.

Keywords: stated preferences, value of a statistical life

JEL Classification: C81, D12, D61, R41

Suggested Citation

Rouwendal, Jan and Blaeij, A.T. de and Rietveld, Piet and Verhoef, Erik T., The Information Content of a Stated Choice Experiment: A New Method and its Application to the Value of a Statistical Life (May 16, 2008). Tinbergen Institute Discussion Paper No. TI 08-053/3, Available at SSRN: https://ssrn.com/abstract=1136145 or http://dx.doi.org/10.2139/ssrn.1136145

Jan Rouwendal (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

A.T. de Blaeij

LEI (Agricultural Economics Research Institute) ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

Piet Rietveld

VU University Amsterdam - Department of Spatial Economics (Deceased)

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446097 (Phone)
+31 20 4446004 (Fax)

Erik T. Verhoef

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 020 4446094 (Phone)
+31 020 4446004 (Fax)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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