How Closely Do Hypothetical Surveys and Laboratory Experiments Predict Field Behavior

We compare the ability of three preference elicitation methods (hypothetical choices, nonhypothetical choices, and nonhypothetical rankings) and three discrete-choice econometric models (the multinomial logit [MNL], the independent availability logit [IAL], and the random parameter logit [RPL]) to predict actual retail shopping behavior in three different product categories (ground beef, wheat flour, and dishwashing liquid). Overall, we find a high level of external validity. Our specific results suggest that the nonhypothetical elicitation approaches, especially the nonhypothetical ranking method, outperformed the hypothetical choice experiment in predicting retail sales. We also find that the RPL can have superior predictive performance, but that the MNL predicts equally well in some circumstances. Key words: contingent valuation, choice experiments, experimental economics, external validity, field experiment. There is perhaps no more important question for researchers working with survey and exper-imental preference elicitation methods than whether the elicited values accurately predict real-world field behavior. A great deal of at-tention has been devoted in recent years to refining preference elicitation methods, in-cluding developments in contingent valuation, conjoint analysis, choice experiments, and ex-perimental auctions. Although a great deal has been learned, there are very few studies exam-ining the external validity of these methods. As such, skepticism surrounding stated and ex-perimental willingness-to-pay values abounds. Practitioners advocating such methods have not adequately established the validity of the methods. The primary purpose of this article is to address these concerns in a specific context and determine whether results from hypothet-ical and real-money purchasing experiments accurately reflect shopping behavior in a gro-cery store, and in the process, we also address some key issues for practitioners of revealed and stated preferences. Why might behavior in laboratory exper-iments differ from behavior in the field? Experiments often involve unfamiliar prefer-ence elicitation methods and may impose con-straints on people that they wouldn’t normall