The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Goods
AbstractThis paper develops a model of demand estimation in which consumers learn about their true preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two quasi experience with a good will make consumers more certain over their preferences in both mean and variance are supported in each case.‐public goods. We find that the predictions of the theoretical exercise that additional
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Bibliographic InfoPaper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2012-17.
Date of creation: Aug 2012
Date of revision:
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Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA
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Bayesian; demand estimation; stated preference; generalized multinomial logit; scale; scale variance.;
Other versions of this item:
- Mikołaj Czajkowski & Nick Hanley & Jacob LaRiviere, 2012. "The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Goods," Working Papers 2012-15, Faculty of Economic Sciences, University of Warsaw.
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
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