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Abstract
According to neoclassical economic theory, the only stated preference
elicitation format that can feasibly be employed in field studies to which truthful response
can be the dominant strategy for all respondents is a single binary choice between the
status quo and one alternative. In studies where the objective is estimation of preferences
for multiple attributes of a good, it is preferred (and, in some cases, necessary) based on
econometric considerations, to present respondents with a sequence of choice tasks.
Economic theory predicts that utility-maximising respondents may find it optimal to
misrepresent their preferences in this elicitation format. In this paper, the effect on stated
preferences of expanding the number of choice tasks per respondent from one to four is
tested using a split sample treatment in an attribute-based survey relating to the
undergrounding of overhead electricity and telecommunications wires in the Australian
Capital Territory. We find evidence to suggest that presenting multiple choice tasks per
respondent decreases estimates of total willingness to pay and that this effect is related to
the ordering of cost levels presented over the sequence of choice tasks. Two behavioural
explanations can be advanced - a weak cost minimisation strategy, which implies
divergence between stated and true preferences, and a ‘good deal / bad deal’ heuristic, in
which stated preferences reflect true preferences that change over the course of the
sequence of choice tasks. Preferences stated in the first of a sequence of choice tasks are
not significantly different from those stated in the incentive compatible single binary
choice task. A key objective of future research will be to establish whether this effect
becomes less prevalent as the number of attributes and alternatives per choice task are
increased.