Analysis of choice inconsistencies in on-line choice experiments: impact on welfare measures

Individuals answering to choice experiments (CEs) are assumed to behave in concordance with standard utility theory. However, empirical evidence finds that these assumptions are frequently violated, impacting on willingness to pay (WTP) estimates. Because the cost attribute plays a key role in CEs used for environmental valuation, this study focuses on the impact of inconsistent choices with respect to cost on WTP, drawing on data from a survey aimed at valuing the environmental and social impacts of organic farming in mountainous olive orchards. An iterative process is used to identify inconsistent choices. Results provide sufficient evidence to suggest that inconsistencies can considerably bias WTP estimates. We propose that identifying and considering inconsistent choices enhances realism and accuracy of the conclusions drawn from CEs in environmental valuation.