Accounting for Response Biases in Latent-Class Models for Choices and Attitudes

We propose a latent-class model (LCM) to analyze contingent-valuation surveys incorporating attitudinal questions capturing protest reasons to identify classes of respondents with similar preferences and attitudes. In contrast to a standard LCM, our model ensures that classes are not contaminated by different types of response biases. Using data regarding the preservation of a world-heritage recreation site, low- and high-protester classes are identified. The difference in estimated willingness to pay (WTP) in these classes is (sic)26, reflecting protest issues. If response biases were ignored, different classes would be identified and the corresponding difference in WTPs would be inflated by 130%. (JEL C35, Q51)