The implications on willingness to pay of respondents ignoring specific attributes

Abstract

Individuals processing the information in a stated choice experiment are typically assumed to evaluate each and every attribute offered within and between alternatives, and to choose their most preferred alternative. However, it has always been thought that some attributes are ignored in this process for many reasons, including a coping strategy to handle one’s perception of the complexity of the choice task. Nonetheless, analysts typically proceed to estimate discrete choice models as if all attributes have influenced the outcome to some degree. The cognitive processes used to evaluate trade-offs are complex with boundaries often placed on the task to assist the respondent. These boundaries can include prioritising attributes and ignoring specific attributes. In this paper we investigate the implications of bounding the information processing task by attribute elimination through ignoring one or more attributes. Using a sample of car commuters in Sydney we estimate mixed logit models that assume all attributes are candidate contributors, and models that assume certain attributes are ignored, the latter based on supplementary information provided by respondents. We compare the value of travel time savings under the alternative attribute processing regimes. Assuming that all attributes are not ignored and duly processed, leads to estimates of parameters which produce significantly different willingness to pay (WTP) to that obtained when the exclusion rule is invoked.