Beyond Current Guidelines: A Proposal for Bringing Behavioral Economics to the Design and Analysis of Stated Preference Surveys

Abstract

Insights from behavioral economics have proven to be relevant for designing and analyzing stated preference (SP) studies. In this paper, we propose an empirical strategy in SP research that (1) evaluates what are arguably the key behavioral assumptions, (2) interprets the responses strictly in light of the outcomes of that evaluation, and (3) reports a broader set of potentially relevant results. The approach relies on specific elements of survey design and analysis not required by current guidelines for SP studies. We illustrate its application with data from a SP study on future management schemes for the Austrian federal forests. In the evaluation of assumptions we find that the response scale, the provision of third-party information, the combination of valuation scenarios, and loss aversion all have an effect on stated WTP. We report tests of behavioral assumptions, estimates from several treatment conditions and complementary preference information, including median values and approval rates in referendum questions involving true cost information. The results demonstrate the feasibility of systematic behavioral approaches in applied SP work. Future research should further explore how the key behavioral assumptions are most usefully tested, and which treatment conditions may produce the most relevant and transparent information for decision-makers.