The relationship between perceived difficulty and randomness in discrete choice experiments: Investigating reasons for and consequences of difficulty

Discrete choice experiments to value environmental goods and services constitute a complex and demanding task for survey respondents. This study looks at the effect of perceived difficulty with the choice tasks on choice consistency and preferences. The choice data come from two parallel surveys valuing river management outcomes in Germany. Results show that perceived difficulty decreases response scale, an indicator of the relative weight of the explained over the random component of indirect utility of a choice alternative. The reasons for this effect have more to do with the design of the actual task in the choice experiment than with the content and topic of the valuation exercise. Results also show only a very limited effect on preferences and willingness to pay for aspects of river management. The proposed econometric strategy manages to effectively separate the effect of difficulty on inter-individual differences of preference and scale. Based on these results, we recommend (i) to rigorously test the attribute design to allow only meaningful trade-offs as perceived by respondents and (ii) to put greater emphasis on the explanation of the choice tasks.