Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment
- Masiero, Lorenzo Istituto di ricerche economiche (IRE), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera
- Hensher, David A. Institute of Transport and Logistics Studies, Faculty of Economics and Business, The University of Sydney
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19.02.2010
16 p
English
Choice 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.
- Language
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- English
- Classification
- Economics
- License
- License undefined
- Identifiers
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- RERO DOC 17416
- ARK ark:/12658/srd1318195
- Persistent URL
- https://n2t.net/ark:/12658/srd1318195
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