Are more profiles better than fewer? Searching for parsimony and relevance in stated choice experiments

Transportation planners increasingly include a stated choice (SC) experiment as part of the armory of empirical sources of information on how individuals respond to current and potential travel contexts. The accumulated experience with SC data has been heavily conditioned on analyst prejudices about the acceptable complexity of the data collection instrument, especially the number of profiles (or treatments) given to each sampled individual (and the number of attributes and alternatives to be processed). It is not uncommon for transport demand modelers to impose stringent limitations on the complexity of an SC experiment. A review of the marketing and transport literature suggests that little is known about the basis for rejecting complex designs or accepting simple designs. Although more complex designs provide the analyst with increasing degrees of freedom in the estimation of models, facilitating nonlinearity in main effects and independent two-way interactions, it is not clear what the overall behavioral gains are in increasing the number of treatments. A complex design is developed as the basis for a stated choice study, producing a fractional factorial of 32 rows. The fraction is then truncated by administering 4, 8, 16, 24, and 32 profiles to a sample of 166 individuals (producing 1,016 treatments) in Australia and New Zealand faced with the decision to fly (or not to fly) between Australia and New Zealand by either Qantas or Ansett under alternative fare regimes. Statistical comparisons of elasticities (an appropriate behavioral basis for comparisons) suggest that the empirical gains within the context of a linear specification of the utility expression associated with each alternative in a discrete choice model may be quite marginal.