Labelling effects in discrete choice experiments

Discrete choice experiment data aimed at eliciting the demand for recreational walking trails on farmland in Ireland is used to explore whether some respondents reach their choices solely on the basis of the alternative’s label. To investigate this type of processing strategy, this paper exploits a discrete mixtures approach that also encompasses continuous distributions to reflect the heterogeneity in preferences for the attributes. We find evidence that a proportion of respondents adopt this processing strategy and that the strategies employed by rural and urban respondents are somewhat different. Results further highlight that model fit and measures of welfare are sensitive to assumptions related to processing strategies among respondents.