STATED PREFERENCE QUESTIONS:
CONTEXT AND OPTIMAL RESPONSE
                                
Theodore Groves 

(coauthors: Richard T. Carson and Mark J. Machina)

Department of Economics
University of California, San Diego
La Jolla, CA  92903

June 2, 1997

We gratefully acknowledge the support of U.S. Environmental Protection
Agency cooperative agreement R-824698 in carrying out the research
reported on in this paper.  The views expressed are those of the authors
and not necessarily those of the U.S. Environmental Protection
Agency.

Stated Preference Models:  Context and Optimal Response

ABSTRACT

Businesses and governments devote substantial resources to the
collection and analysis of survey data concerning the public's
preferences.  The possibility of strategic responses to such surveys is
analyzed.  Consequential and hypothetical surveys are defined.  
For the former the question is posed:  what form should
strategic behavior take?  The particular form is shown to be context
dependent.  Key features of context such the question response format
and the nature of the potential change in the agent's choice set are
examined and several propositions concerning optimal strategic response
are derived.  In a number of important cases, the strategic response is
shown to coincide with truth-telling and, in other instances, valuable
information can be extracted from a strategic response if its nature is
understood.  Hopeless cases are identified.