Estimation on Stated-Preference Experiments Constructed from Revealed-Preference Choices
30 May 2007
By Professor Kenneth Train with Professor Wesley w. Wilson of the University of Oregon
In this paper, NERA Vice President Professor Kenneth Train and Professor Wesley W. Wilson of the University of Oregon describe a new way of obtaining information about preferences. The authors point out that constructing stated-preference experiments from a choice that the respondent made in a revealed-preference setting can enhance the realism of the stated-preference task and the efficacy of preference revelation. However, the practice creates endogeneity in the attributes of the stated-preference alternatives. The authors also describe a general estimation method that accounts for the endogeneity and give specific examples based on standard and mixed logit specifications of the revealed preference choice. They demonstrate conditions under which standard estimation methods are consistent despite the endogeneity for one type of experimental design. The authors conclude by illustrating the more general methodology through an application to shippers' choice of route and mode along the Columbia/Snake River system.
