Research shows that people do not always process health information in the ways assumed by economic models. Our research in this area focuses on the challenges of identifying non-compensatory decision making, and better understanding how people process the cost and risk information in stated preference tasks.

Surveys, econometric analysis and experimental methods (eye-tracking and induced value experiments) are used to identify non-utility maximising decision rules in stated preference responses.

Current Projects

Attributes aggregation in multi-attribute choice: need we worry?

Choice experiments (CEs) are commonly employed in economics to value non-marketed goods. Within CEs it is assumed that individuals consider all attributes and make a trade-off between them. However, attributes-based decision-making is cognitively demanding, triggering the adoption of alternative decision rules.

There is a growing interest in heuristics/rules that individuals use when processing information in multi-attribute choice. We develop a framework in which individuals restructure the multi-attribute information into a meta-attribute (e.g., convert non-monetary attributes into a single quality dimension) before making their decisions. We estimated a non-linear utility model allowing attribute aggregation (AA) to depend on the information structure.

This new model assumes participants are more likely to aggregate the quality information into a meta-attribute when the quality attributes provide similar information about the good or service. We find evidence of attribute aggregation when responding to CEs, with the probability of adopting attribute aggregation greater for homogenous information. AA is more prevalent amongst older and female participants, leads to improvements in model fit and has implications for welfare estimates.

HERU researchers involved in this research project: Mandy Ryan and Mesfin Genie

External collaborator: Nicolas Krucien (Evidera)

 

Does calorie labelling need the green light? Using eye-tracking within a discrete choice experiment

The purpose of this project is to analyse how consumers react to traffic light colour coding (TLCC) information regarding fat, saturated fat, sugar, salt and calories, as well as price, when purchasing a sandwich.

The main research question will specifically look at the impact of colour coding calories (the current policy recommendation is for calories not to be colour coded) on consumer’s choices. In order to better understand our results, we will also be analysing aspects consumers focus on when looking at TLLC label nutrition information as well as the role price plays on their choices. Potential behavioural differences associated with socio-economic characteristics will be taken into account.

This project is being conducted in collaboration with the Rowett Institution of Nutrition and Health.

HERU researchers involved in this research project: Patricia Norwood, Nicolas Krucien, Mandy Ryan and Anne Ludbrook

 

How do individuals respond to DCEs? Alternatives to utility maximisation

Health decisions are often made in a context of urgency and uncertainty, making other concepts, such as regret, also relevant. The random regret minimisation (RRM) model has been developed as an alternative to RUM. However the link between RRM and the psychological concept of regret remains unclear.

In this study we tackle this issue by comparing the performance of the RUM and RRM models in the context of cancer follow-up care decisions. We develop a variant of the RRM mode. We verify the properties of this new model, random gain-loss maximisation (RGLM), in a simulation study.

The comparison of RUM and RGLM models shows that RGLM allows for a small but significant improvement in in-sample fit, but similar level of predictive validity (out-of-sample fit). Initial anlysis suggests limited support for regret minimisation in the analysis of cancer follow-up care decisions. 

HERU researchers involved in this research project: Verity Watson and Mandy Ryan

External collaborators: N. Krucien (Evidera)

(HESG) Summer 2015, Lancaster University, Lancaster, 22-24 June 2015.

To pay or not to pay? The impact of the price attribute in choice experiments

Discrete choice experiments (DCEs) commonly include a price attribute to generate willingness to pay (WTP) estimates. Concern has been expressed that the inclusion of a price attribute challenges the credibility of the experiment when valuing aspects of publicly funded healthcare systems. However, very little research has explored this issue. We allocated subjects across two versions of a DCE: one including a monetary attribute and the other excluding a monetary attribute. The DCE was identical in all other respects. Analysis is ongoing.

HERU researchers involved in this research project: Mandy Ryan

External Collaborator: M. Genie (University of Venice) and N. Krucien (Evidera)

 

What can eye tracking tell us about decision-making heuristics in discrete choice experiments

Discrete choice experiments (DCEs) are widely applied in economics to study choice behaviour. Current research is limited in terms of understanding how individuals process information and make choices. We explore how novel eye-tracking methods can provide insight into decision-making processes underlying choices, as well as the implications for choice data analysis.

Initial results show evidence of

  • (i) top-to-bottom,
  • (ii) left-to-right and
  • (iii) first-to-last order biases in processing multi-attribute information.

Experimental factors – whether attributes are defined as ‘best’ or ‘worst’, choice task complexity and attribute ordering – also influence information processing. Combining eye-tracking and choices data, the random regret minimisation (RRM) choice modelling framework was able to link participants’ information search and choices behaviour.

New choice models describing both processes and outcomes of decision making are expected to provide a better account of individuals’ preferences. We are also currently investigating what eye-tracking can tell us about ordering effects in DCEs. 

HERU researchers involved in this research project: Mandy Ryan

External Collaborators: F. Hermens (University of Tilburg) and N. Krucien (Evidera)

 

Using induced experiments to infer decision making strategies in discrete choice experiments

This study investigates the decision making strategies used by respondents when completing a discrete choice experiment (DCE). We address this question using an experimental economics technique: an induced value experiment.

Our results indicate that a large proportion of respondents do not make pay-off (utility) maximising choices. We investigate the presence of satisficing behaviour and other non-utility maximising decision rules in both hypothetical and incentivised choices.

HERU researchers involved in this research project: Verity Watson

External collaborators: S Luchini (University of Aix-Marseille)

Recently Completed Projects

Eliciting preferences for healthy and sustainable food in the lab

Previous studies eliciting preferences for food products have found that different elicitation mechanisms lead to different valuations for the same good. There are two reasons for this: differences in the accuracy with which mechanisms elicit preferences or differences in how preferences are formed in response to the mechanism.

This is the first study to distinguish between these explanations using an innovative experimental design that combines induced value (IV) and home grown (HG) preference procedures for a Second Price Vickrey Auction (SPVA) and discrete choice experiment (DCE).

We elicit IV preferences for a fictitious good (token) and HG preferences for real food product (beef-based lasagne) that varies in healthiness and environmental sustainability. We find HG preferences elicited using SPVAs and DCEs are not different.

After controlling for potential differences in sample composition, our results suggest that HG preference patters varies depending on the elicitation mechanism. Our IV results show that the DCE is the most demand revealing preference-elicitation procedure. Taken together, our results imply that that lack of isomorphism in our empirical application is caused by a value-elicitation problem in the SPVA.

Outcome and Translation

Our results imply that that lack of isomorphism in our empirical application is caused by a value-elicitation problem in the SPVA.

HERU researchers involved in this research project: Verity Watson

External collaborators:  Ceronni, S. (Queen's University Belfast); MacDiarmid, J. (Rowett Institute of Nutrition and Health, University of Aberdeen).

 

For better or worse? Investigating the validity of best-worst scaling experiments in health

Choice experiments are frequently used in health economics to measure preferences for non-market goods. Best worst discrete choice experiment (BWDCE) has been proposed as a variant of the traditional “pick the best” approach. BWDCE, where participants choose the best and worst options, is argued to generate more precise preference estimates because of the additional information collected. However, for this to be the case two conditions must hold:

  1. best and worst decisions provide similar information about preferences, and
  2. asking individuals to answer more than one choice question per task does not reduce data quality. Whether these conditions hold remains under researched.

This is the first study to compare participants’ choices across three experimental conditions:

  • (i) BEST choices only,
  • (ii) WORST choices only, and
  • (iii) BEST & WORST choices (BWDCE).

We find responses to worst choices are noisier. Implied preferences from the best only and worst only choices are qualitatively different, leading to different WTP values. Respondents to BWDCE tasks are of lower quality and respondents are more likely to use simplifying decision heuristics.

Outcome and Translation

As BWDCE is being increasingly used in health economics we encourage further investigation of the method and identify important area for future research.

HERU researchers involved in this research project: Nicolas Krucien and Mandy Ryan

External collaborator:  J. Sicsic (INSERM)

 

PhD: Do I care or do I not? - An empirical assessment of decision heuristics in discrete choice experiments

Discrete choice experiments (DCEs) are widely applied by health economists to elicit individuals’ preferences for healthcare services. The analysis of DCE data assumes that respondents consider and trade all attributes of the healthcare service under valuation when completing the hypothetical choice tasks. Over the last ten years, this assumption has been questioned and several studies suggest that respondents may ignore attributes as a simplifying choice heuristic. This PhD (1) investigates the presence of such decision heuristics in DCE responses, (2) explores causes of such behaviour and (3) evaluates methods to determine if a respondent used a particular heuristic.

Outcome and translation

Respondents are found to ignore DCE attributes and accounting for such behaviour may improve the validity of estimates. Current approaches assume that ignoring attributes is a heuristic to simplify choices. However, this PhD demonstrated that attributes may be ignored because they are not valued. Approaches that do not distinguish between non-valuation and heuristic are found to be potentially misleading. Furthermore, whilst respondents had difficulty reporting their information processing strategy, statistical methods could not distinguish between preference and heuristic. Future research could use process tracking techniques (e.g. eye-tracking and think aloud), pre-piloting and other qualitative methods (e.g. interviews) to better understand decision-making heuristics. The PhD also found that respondents’ use of heuristics may be caused by either a ‘too simple’ or ‘too difficult’ DCE design.

PhD Student: Sebastian Heidenreich

Supervisors: E Phimister (Economics, University of Aberdeen Business School), Mandy Ryan and Verity Watson (HERU)