Complexity in choice experiments: Choice of the status quo alternative and implications for welfare measurement

Abstract

We examine the propensity of respondents to choose the status quo (SQ) or current situation alternative as a function of complexity in two separate state-of-the-world choice experiments. Complexity in each choice set was characterized as the number of single and multiple changes in levels of attributes from the current situation and the order of the choice task in the sequence of multiple tasks provided to respondents. We show that increasing complexity leads to increased choice of the SQ and that a respondent's age and level of education also influenced this choice. We outline the effects of the alternate approaches for incorporating the SQ into welfare measurement. These findings have implications for the design of stated preference experiments, examining passive use values and for empirical analysis leading to welfare measurement. © 2009 The Authors. Journal compilation © 2009 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.