DeShazo Tourism Infrastructure Survey

The effect of consumers' real-world choice sets on inferences from stated preference surveys

We develop a model that assesses the influence of choice set misspecification arising from the omission of perceived substitutes among real-world alternatives in the same class of goods. This problem may be present when individuals are allowed to select a "no purchase" option instead of being forced to choose from an explicit set of SP alternatives. A comparison of rival models suggests researchers who overlook the presence of perceived real alternatives related to an SP experiment can end up with noticeably biased welfare estimates.