Scenario Adjustment in Stated Preference Research

Stated preference (SP) survey methods have been used increasingly to assess willingness to pay for a wide variety of non-market goods and services, including reductions in risks to life and health. Poorly designed SP studies are subject to a number of well-known biases, but many of these biases can be minimized when they are anticipated ex ante and accommodated in the study’s design or during data analysis. We identify another source of potential bias, which we call “scenario adjustment,†where respondents assume that the substantive alternative(s) in an SP choice set, in their own particular case, will be different than the survey instrument describes. We use an existing survey, developed to ascertain willingness to pay for private health-risk reduction programs, to demonstrate a strategy to control and correct for scenario adjustment in the estimation of willingness to pay. This strategy involves data from carefully worded follow-up questions and ex post econometric controls for each respondent’s subjective departures from the intended choice scenario. Our research has important implications for the design of future SP surveys.