Discrete Choice Experiment
‘Irrational’ stated preferences: a quantitative and qualitative investigation
Article first published online: 25 JUN 2004
Copyright © 2004 John Wiley & Sons, Ltd.
Volume 14, Issue 3, pages 307–322, March 2005
How to Cite
Miguel, F. S., Ryan, M. and Amaya-Amaya, M. (2005), ‘Irrational’ stated preferences: a quantitative and qualitative investigation. Health Econ., 14: 307–322. doi: 10.1002/hec.912
- Issue published online: 15 FEB 2005
- Article first published online: 25 JUN 2004
- Manuscript Accepted: 2 FEB 2004
- Manuscript Received: 1 AUG 2002
- stated preferences;
Individuals' rationality has been a key issue long debated in Economics. While normative theories establish the way ‘rational’ consumers should behave, many empirical studies have documented numerous systematic violations of normative principles. This has led some to question the validity of classic economic models as an adequate approximation of individuals' real decision-making. This paper aims to shed more light on this debate. A stated preference choice experiment was set up to test rational choice properties. Attention was given to the extent to which satisfaction of such tests is related to both the complexity of the design, and subject characteristics. Quantitative and qualitative methods are applied. The majority of respondents passed the rationality tests. Satisfaction of the tests was sensitive to normatively irrelevant factors such as the complexity of the task and demographic characteristics. A significant proportion of those individuals who ‘failed’ seem to have reformulated the experiment in some way in their mental process. Implications for the design and analyses of future DCEs are discussed. Copyright © 2004 John Wiley & Sons, Ltd.