The principal objectives of this research project are to (1) develop a novel theoretical framework that would explain the sources of preference uncertainty in stated choice experiments and (2) gather original empirical data about preference uncertainty through a survey to test and improve the theoretical framework.
More specifically, the project will examine the role of policy outcome uncertainty, risk communication devices, the nature of the good being valued (public vs. private), and socio-cultural and institutional setting in explaining variations in preference uncertainty in stated choice experiments along with other relevant factors identified in the existing stated preference literature. It will also compare the performance of alternative formats for eliciting preference uncertainty from respondents and assess various econometric approaches for incorporating this information into choice models.
The findings of this project will provide new insights into the most important drivers of preference uncertainty and offer an underlying theory that supports these findings. The outcomes are also expected to improve our understanding of the sources of hypothetical bias and yield new evidence about the validity of welfare measures obtained with the stated choice experiment method. The application of the project involves conducting an online survey among the Swiss households in order to elicit their preferences and willingness to pay for flood mitigation and adaptation policies to reduce future flood risk.