A Review of Stated Choice Method

This paper reviews Stated Choice Method (SCM), paying particular attentions on its theoretical background, application, empirical models, experimental design, and procedure to execute. The review suggests that comparing to other stated preference (SP) methods, SCM has a major advantage that it meets the objective of a stated preference analysis to simulate actual consumer behavior by allowing simultaneous evaluations of a number of alternatives or a choice between alternatives. Some advanced models based on the degrees of relaxation of the Independently and Identically Distributed (IID) assumption on error terms are introduced. More complex model seems to be more plausible than relatively simple specifications. Two tests for nested and non-nested models are also discussed to help judge that one model is superior to another model. Finally, this paper introduces the procedure of executing a Stated Choice (SC) experiment.