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Linking perceived choice complexity with scale heterogeneity in discrete choice experiments: home heating in Finland

Enni Ruokamo (), Mikolaj Czajkowski (), Nick Hanley (), A. Juutinen and R. Svento
Additional contact information
A. Juutinen: Department of Economics, Oulu Business School, University of Oulu, Finland
R. Svento: Department of Economics, Oulu Business School, University of Oulu, Finland

Discussion Papers in Environment and Development Economics from University of St. Andrews, School of Geography and Sustainable Development

Abstract: Choosing a specific heating system is a complex and difficult decision for homeowners as there exists a wide array of heating technologies with different characteristics that one can consider before purchasing. We include multiple heating technologies and attributes in our Choice Experiment design and explore the effect of perceived choice complexity on the randomness of choices. In particular, we investigate how different self-evaluated factors of choice complexity affect mean scale and scale variance. Our findings suggest that perceived choice complexity has a systematic impact on the parameters of econometric models of choice. However, there are differences between alternative selfevaluated complexity-related covariates. Results indicate that individuals who report that answering the choice tasks was difficult have less deterministic choices. Perceptions of the realism of home heating choice options also affect scale and scale variance.

Keywords: Home heating; Choice experiment; Choice modelling; Scale heterogeneity; Generalized mixed logit; Complexity (search for similar items in EconPapers)
JEL-codes: D12 Q40 Q48 Q51 Q55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-upt
Date: 2016-10
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Working Paper: Linking perceived choice complexity with scale heterogeneity in discrete choice experiments: home heating in Finland (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:sss:wpaper:2016-16

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