Title
Investigating willingness to pay : willingness to accept asymmetry in choice experiments
Description
We examine discrepancies between WTP and WTA responses within a choice experiment frame. We test linear and non-linear forms for the utility function allowing for both declining marginal utility and loss aversion with respect to each attribute. Findings show that there are significant non-linearities in the utility function even when the range of attribute levels is relatively small. This in turn implies that the WTP-WTA ratio varies according to the particular provision change under consideration. An important source for the WTP-WTA disparity observed is found to be significant loss-aversion in all the attributes including the price, an issue not typically considered in choice experiment applications.
URL
http://www.icmconference.org.uk/index.php/icmc/icmc2009/paper/viewFile/113/17
URL Description
Full text
Language
English
Author
Bruno Lanz
Author
Riccardo Scarpa
Author
Allan Provins
Author
Ian Bateman
Author
Ken G. Willis

experimental economics; economics; choice

Body involved
Institute for Transport Studies at the University of Leeds
Is this item peer reviewed?
No
Body involved role
Organiser
Conference event title
International Choice Modelling conference
ConferenceLocation
Leeds
Conference number
1st