Complexity in choice experiments: choice of the status quo alternative and implications for welfare measurement
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We examine the propensity of respondents to choose the status quo (SQ) or current
situation alternative as a function of complexity in two separate state-of-the-world
choice experiments. Complexity in each choice set was characterized as the number of
single and multiple changes in levels of attributes from the current situation and the
order of the choice task in the sequence of multiple tasks provided to respondents. We
show that increasing complexity leads to increased choice of the SQ and that a respondent’s
age and level of education also influenced this choice. We outline the effects of
the alternate approaches for incorporating the SQ into welfare measurement. These
findings have implications for the design of stated preference experiments, examining
passive use values and for empirical analysis leading to welfare measurement.