Examining labelling effects within discrete choice experiments: An application to recreational site choice

• We examine if respondents choose based on the label only in a choice experiment.
• We compare urban and rural residents in their preferences for farmland recreation.
• We find that a sizeable proportion of the sample choose based on the label only.
• We highlight large differences in preferences between rural and urban residents.
• We find a huge impact on welfare estimates after accounting for labelling effects.

Data from a discrete choice experiment aimed at eliciting the demand for recreational walking trails on farmland in Ireland is used to explore whether some respondents reach their choices solely on the basis of the alternative's label. To investigate this, this paper exploits a discrete mixtures approach that also encompasses continuous distributions to reflect the heterogeneity in preferences for the attributes and alternatives. We find evidence that a proportion of respondents choose on the basis of the label only and that differences emerge between rural and urban respondents. We provide a number of alternative explanations for why this may occur. Results highlight a large impact on welfare measures when we accommodate the fact that a proportion of respondents choose on the basis of the label only.