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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 (), Artti Juutinen and Rauli Svento
Additional contact information
Artti Juutinen: Department of Economics, Oulu Business School; Natural Resources Institute Finland (Luke)
Rauli Svento: Department of Economics, Oulu Business School

No 2016-30, Working Papers from Faculty of Economic Sciences, University of Warsaw

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 self-evaluated 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, nep-eur and nep-exp
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
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http://www.wne.uw.edu.pl/index.php/download_file/3162/ First version, 2016 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2016-30

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