Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment
AbstractChoice behaviour might be determined by asymmetric preferences whether the consumers are faced with gains or losses. This paper investigates loss aversion and diminishing sensitivity, and analyzes their implications on willingness to pay and willingness to accept measures in a reference pivoted choice experiment in a freight transport framework. The results suggest a significant model fit improvement when preferences are treated as asymmetric, proving both loss aversion and diminishing sensitivity. The implications on willingness to pay and willingness to accept indicators are particular relevant showing a remarkable difference between symmetric and asymmetric model specifications. Not accounting for loss aversion and diminishing sensitivity, when present, produces misleading results and might affect significantly the policy decisions.
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Bibliographic InfoArticle provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.
Volume (Year): 44 (2010)
Issue (Month): 5 (June)
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Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description
Other versions of this item:
- Lorenzo Masiero & David A. Hensher, 2010. "Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment," Quaderni della facoltÃ di Scienze economiche dell'UniversitÃ di Lugano 1004, USI Università della Svizzera italiana.
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
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