Addressing empirical challenges related to the incentive compatibility of stated preferences methods

An emerging theoretical literature focused on the incentive compatibility of stated prefer-ence surveys offers a new lens through which to view extant evidence on external validity,and provides guidance for practitioners. However, critical theoretical assumptions rest onlatent respondent beliefs, such as the belief that respondents view surveys as potentiallyinfluencing policy (i.e., policy consequentiality), which gives rise to pressing empirical chal-lenges. In this study, we develop a Hybrid Mixed Logit model capable of integrating multiplelatent beliefs, and subjective measures of these beliefs, into a discrete choice model of statedpreferences. Planned use of a resource, which can also be considered a latent variable, isfrequently an important consideration when modelling stated preferences for a change ina good, and we demonstrate how our framework can be used to incorporate this informa-tion simultaneously. We further explore whether simple information treatments, whichvary the degree to which the potential role of surveys in informing policy is emphasized,can influence respondent beliefs. Our results suggest that latent beliefs over consequen-tiality, resource use and, to a much lesser extent, the information treatments significantlyinfluence elicited willingness to pay.