Loss aversion, reference dependence and diminishing sensitivity in choice experiments
A Scott, J Witt
Journal of Choice Modelling | Elsevier | Published : 2020
This paper tests for the existence of loss aversion, reference dependence and diminishing sensitivity in a discrete choice experiment (DCE). A status quo alternative is introduced in a DCE of nurses' job choices and modeled as an individual-specific third alternative representing the respondent's current job. This provides a feasible method for including a status quo, which changes the reference point for each respondent. The increased salience of the status quo changes the size of any losses or gains when comparing Job A or Job B with their current situation, and since losses are valued more than gains, affects the marginal utility of each attribute. Models that differentially incorporate l..View full abstract
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Awarded by Australian Research Council (ARC)
This research was funded by an Australian Research Council (ARC) Linkage Grant (LP0669209) and the Department of Health, State Government of Victoria (Victoria).