Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment

Lorenzo Masiero, David A. Hensher

Research output: Journal article publicationJournal articleAcademic researchpeer-review

58 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)349-358
Number of pages10
JournalTransportation Research Part A: Policy and Practice
Volume44
Issue number5
DOIs
Publication statusPublished - 1 Jun 2010
Externally publishedYes

Keywords

  • Choice experiments
  • Freight transport
  • Preference asymmetry
  • Willingness to pay

ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Transportation
  • Management Science and Operations Research

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