Predictive validity of Discrete Choice Experiments
Industry Project with the Office of Environment and Heritage
Hypothetical choices need to be grounded in market realities to predict well to market scenarios.
This project validated individuals’ stated preferences for visiting NSW beaches (collected from a Discrete Choice Experiment), by combining their stated preference information with their actual beach visitation behaviour (revealed preference data).
Coastal resources are facing a number of threats including storm impacts, congestion through rapid population increases in regional coastal locations, and climate change. Understanding the economic importance of recreation and tourism in these locations leads to better informed decisions about their management and protection for both current users and future generations.
A sample of 1436 beach-going residents in NSW were asked to describe their beach visitation behaviour over the past 12 months for 39 beaches, including how many trips, activities, and group size. In addition, respondents saw a Discrete Choice Experiment to understand preferences for beach characteristics from presentation of hypothetical beaches.
Results showed that on average, respondents visited the beach 14 times per year. 70% of respondents had visited Bondi and Manly beach. The presence of changing rooms, lifeguards, and restaurants had the biggest impact on visitor welfare.
By combining the stated and revealed preference data, hypothetical bias was minimised, giving more robust beach usage forecasts and welfare estimates.
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