A comparison of the impacts of aspects of prospect theory on WTP/WTA estimated in preference and WTP/WTA space

European Journal of Transport and Infrastructure Research

Volumn 10, Issue 4, 2010, Pages 330-346

  Rose, John M ^a   Masiero, Lorenzo ^b  

^a UNIVERSITY OF SYDNEY   (Australia)

^b UNIVERSITY OF LUGANO   (Switzerland)

Author keywords

Choice experiments; Loss aversion and diminishing sensitivities; Preference asymmetry; Preference space; Prospect theory; Reference dependence; Willingness to pay willingness to accept space

Indexed keywords

DECISION MAKING; SPECIFICATIONS;

CHOICE EXPERIMENTS; LOSS AVERSION; PREFERENCE ASYMMETRY; PREFERENCE SPACE; PROSPECT THEORY; REFERENCE DEPENDENCE; WILLINGNESS TO PAY;

DECISION THEORY;

EID: 78449291483     PISSN: None     EISSN: 15677141     Source Type: Journal    
DOI: 10.18757/ejtir.2010.10.4.2898     Document Type: Article

References (34)

1. Bateman, I., Munro, A., Rhodes, B., Starmer, C. and Sugden, R. (1997). A test of the theory of reference-dependent preferences. Quarterly Journal of Economics 112, pp. 479-505.
2. Bishop, R.C. and Heberlein, T.A. (1979). Measuring values of extra-market goods: are indirect measures biased? American Journal of Agricultural Economics 61, pp. 926-930.
3. Boyce, R.R., Brown, T.C., Thomas, C. McClelland, G.H. Peterson, G.L. and Schulze, W.D. (1992). An experimental examination of intrinsic values as a source of the WTA-WTP disparity. The American Economic Review, 87, pp. 1366-1373.
4. Cameron, T. and James, M. (1987). Efficient estimation methods for closed-ended contingent valuation survey data. Review of Economics and Statistics, 69, pp. 269-276.
5. Daly, A., Hess, S. and Train, K. (2009). Assuring Finite Moments For Willingness To Pay In Random Coefficient Models. European Transport Conference, Leeuwenhorst, October.
6. De Borger, B. And Fosgerau, M. (2008). The trade-off between money and travel time: a test of the theory of reference-dependent preferences. Journal of Urban Economics 64, pp. 101-115.
7. Fiebig, D., Keane, M., Louviere, J. and Wasi, N. (2010). The generalized multinomial logit: accounting for scale and coefficient heterogeneity, Marketing Science, 29(3), pp. 393-421
8. Greene, W.H. and Hensher, D.A. (2010). Does scale heterogeneity across individuals matter? An empirical assessment of alternative logit models. Transportation, 37(3), pp. 413-428
9. Hensher, D.A. (1976). Valuation of commuter travel time savings: an alternative procedure. In: Heggie, I.G. (Ed.), Modal Choice and value of Travel Time. Oxford University Press, Oxford.
10. Hensher, D.A. (2001). The Sensitivity of the Valuation of Travel Time Savings to the Specification of Unobserved Effects.Transportation Research Part E 37 (2-3), pp. 129-142.
11. Hensher, D.A. (2008). Joint estimation of process and outcome in choice experiments and implications for willingness to pay.Journal of Transport Economics and Policy 42 (2), pp. 297-322.
12. Hensher, D.A., Shore, N. and Train, K. (2005). Households' Willingness to Pay for Water Service Attributes. Environmental and Resource Economics 32, pp. 509-531.
13. Hensher, D.A. and Greene, W.H. (2009). Taming analytical distributions: valuation in WTP and utility space in the presence of taste and scale heterogeneity, Institute of Transport andLogistics Studies, University of Sydney, July.
14. Hensher, D.A. and Rose, J.M. (2004). Behavioural Valuation of Travel Time Savings: Car, Light Commercial and Heavy Vehicle Travel for commuting, non-commuting and business trips, report prepared for ABN Amro and Thiess Consortium.
15. Hess, S., Rose, J.M. and Hensher, D.A. (2008). Asymmetric preference formation in willingness to pay estimates in discrete choice models.Transportation Research Part E 44(5), pp. 847-863.
16. Hjorth, K. and Fosgerau, M. (2009). Determinants of the degree of loss aversion. Paper selected for presentation at the International Choice Modelling Conference 2009, Leeds (UK).
17. Horowitz, J. and McConnell, K.E. (2002). A Review of WTA-WTP Studies.Journal of Environmental Economics and Management 44, pp. 426-47.
18. Kahneman, D. and Tversky A. (1979). Prospect Theory: an analysis of decision under risk. Econometrica 47 (2), pp. 263-291.
19. Krinsky, I. and Robb, A.L. (1990). On approximating the statistical properties of elasticities: a correction, Review of Economics and Statistics, 72, pp. 189-190.
20. Krinsky, I. and Robb, A.L. (1986). On approximating the statistical properties of elasticities.Review of Economics and Statistics, 68, pp. 715-719.
21. Lanz, B., Provins, A., Bateman, I., Scarpa, R., Willis, K. and Ozdemiroglu, E. (2009).Investigating willingness to pay - willingness to accept asymmetry in choice experiments.International Choice Modelling Conference 2009, Leeds (UK).
22. Li, Z. and Hensher, D.A. (in press) Prospect Theoretic Contributions in Understanding Traveller Behaviour under Risk or Uncertainty: A Review and Some Comments, Transport Reviews.
23. Mabit, S., Hess, S. and Caussade, S. (2008). Correlation and willingness-to-pay indicators in transport demand modelling. 87th Annual Meeting of the Transportation Research Board, Washington, D.C.
24. Masiero, L. and Hensher, D.A. (2009). Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment, Institute of Transport and Logistics Studies, University of Sydney, July.
25. McFadden, D. (1974). Conditional logit analysis of qualitative choice behavior. In: Zarembka, P. (Ed.), Frontiers in Econometrics. Academic Press, New York.
26. Revelt, D. and Train, K. (1998). Mixed logit with repeated choices. Review of Economics and Statistics 80, pp. 647-657.
27. Rose, J.M. and Bliemer, M.C.J. (2009) Constructing Efficient Stated Choice Experimental Designs, Transport Reviews, 29(5), pp. 587-617.
28. Rose, J.M., Bliemer, M.C., Hensher, D.A. and Collins, A.T. (2008). Designing efficient stated choice experiments in the presence of reference alternatives. Transportation Research B 42(4), pp. 395-406.
29. Rowe, R.D., D'Arge, R.C. and Brookshire, D.S., (1980). An experiment on the economic value of visibility.Journal of Environmental Economics and Management 7, pp. 1-19.
30. Scarpa, R., Thiene, M. and Train, K. (2008). Utility in willingness to pay space: a tool to address confounding random scale effects in destination choice to the Alps. American Journal of Agricultural Economics 90(4), pp. 994-1010.
31. Sonnier, G., Ainslie, A. and Otter, T. (2007). Heterogeneity distributions of willingness to-pay in choice models.Quantitative Marketing Economics 5(3), pp. 313-331.
32. Tversky, A. and Kahneman, D. (1991). Loss aversion in riskless choice: a reference-dependent model. Quarterly Journal of Economics 106, pp. 1039-1061.
33. Train, K. (2003). Discrete Choice Methods with Simulation. Cambridge University Press, Cambridge, 2003.
34. Train, K. and Weeks, M. (2005). Discrete choice models in preference space and willingness-to-pay space. In: R. Scarpa and A. Alberini (Eds.), Application of simulation methods in environmental and resource economics. Springer Publisher, Dordrecht.