How much is too much? - An investigation of the effect of the number of choice sets, starting point and the choice of bid vectors in choice experiments

In a split sample design, we examine how the number of choice sets, design of the first choice set (starting point), and the choice of attribute levels in the cost attribute affect the precision in the elicited preferences in otherwise completely identical choice experiment surveys.

These issues are investigated for Swedish households’ marginal willingness to pay to reduce power outages. Our results indicate that neither the number of choice sets nor the starting point choice set has a significant impact on estimated marginal willingness to pay, while the effect was significant for the additive scaling of the cost vector. At the end of the paper we discuss the implications of our results on future developments and applications of choice experiments.