Convergent Validity of Attribute-Based,Choice Questions in Stated-Preference Studies

The application of attribute-based choice questions is well established in the marketing literature, but there are unique aspects of the design that warrant investigation to assess their validity for economic welfare estimation. Three design issues are investigated in this paper: (1) the placement of the monetary stimulus (policy cost to respondents) in the sequence of attributes, (2) the number of policy alternatives respondents are asked to consider in choice questions (two versus three), and (3) the inclusion, versus exclusion, of a status-quo alternative in choice questions. The data used to implement these investigations are from a survey designed to estimate the value Maine residents place on a farmland conservation easement program. Tests of convergent validity indicate that the placement of the monetary stimulus, first versus last in the list of attributes, did not affect estimates of preference parameters, significant differences between questions with three versus two alternatives did occur, and the inclusion/exclusion of a status-quo alternative did not affect preference parameters.