Bayesian Conjoint Choice Designs for Measuring Willingness to Pay
Environmental and Resource Economics , Volume 48 - Issue 1 p. 129- 149
In this paper, we propose a new criterion for selecting efficient conjoint choice designs when the interest is in quantifying willingness to pay (WTP). The new criterion, which we call the WTP-optimality criterion, is based on the c-optimality criterion which is often used in the optimal experimental design literature. We use a simulation study to evaluate the designs generated using the WTP-optimality criterion and discuss the design of a real-life conjoint experiment from the literature. The results show that the new criterion leads to designs that yield more precise estimates of the WTP than Bayesian D-optimal conjoint choice designs, which are increasingly being seen as the state-of-the-art designs for conjoint choice studies, and to a substantial reduction in the occurrence of unrealistically high WTP estimates.
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|Environmental and Resource Economics|
|Organisation||Erasmus Research Institute of Management|
Vermeulen, B, Goos, P.P, & Scarpa, R. (2011). Bayesian Conjoint Choice Designs for Measuring Willingness to Pay. Environmental and Resource Economics, 48(1), 129–149. doi:10.1007/s10640-010-9401-6