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Deleting ‘irrational’ responses from discrete choice experiments: a case of investigating or imposing preferences?
Author(s) -
Lancsar Emily,
Louviere Jordan
Publication year - 2006
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1104
Subject(s) - rationality , irrational number , preference , economics , expected utility hypothesis , explanatory power , satisficing , interpretation (philosophy) , positive economics , microeconomics , mathematical economics , computer science , mathematics , epistemology , philosophy , geometry , programming language
Investigation of the ‘rationality’ of responses to discrete choice experiments (DCEs) has been a theme of research in health economics. Responses have been deleted from DCEs where they have been deemed by researchers to (a) be ‘irrational’, defined by such studies as failing tests for non‐satiation, or (b) represent lexicographic preferences. This paper outlines a number of reasons why deleting responses from DCEs may be inappropriate after first reviewing the theory underpinning rationality, highlighting that the importance placed on rationality depends on the approach to consumer theory to which one ascribes. The aim of this paper is not to suggest that all preferences elicited via DCEs are rational. Instead, it is to suggest a number of reasons why it may not be the case that all preferences labelled as ‘irrational’ are indeed so. Hence, deleting responses may result in the removal of valid preferences; induce sample selection bias; and reduce the statistical efficiency and power of the estimated choice models. Further, evidence suggests random utility theory may be able to cope with such preferences. Finally, we discuss a number of implications for the design, implementation and interpretation of DCEs and recommend caution regarding the deletion of preferences from stated preference experiments. Copyright © 2006 John Wiley & Sons, Ltd.