Abstract It is widely recognized that individual decision-making is subject to the evaluation of gains and losses around a reference point. The estimation of discrete choice models increasingly use data from stated choice experiments which are pivoted around a reference alternative. However, to date, the specification of a reference alternative in transport studies has been fixed, whereas it is common to observe individuals adjusting their preferences according to a change in their reference point. This paper focuses on individual reactions, in a freight choice context, to a negative change in the reference alternative values, identifying the behavioural implications in terms of loss aversion and diminishing sensitivity. The results show a significant adjustment in the valuation of gains and losses around a shifted reference alternative. In particular, we find an average increase in loss aversion for cost and time attributes, and a substantial decrease for punctuality. These findings are translated to significant differences in the willingness to pay and willingness to accept measures, providing supporting evidence of respondents’ behavioural reaction.


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    Title :

    Shift of reference point and implications on behavioral reaction to gains and losses


    Contributors:

    Published in:

    Publication date :

    2010




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English



    Classification :

    BKL:    74.75$jVerkehrsplanung$jVerkehrspolitik / 55.80$jVerkehrswesen$jTransportwesen: Allgemeines / 55.80 Verkehrswesen, Transportwesen: Allgemeines / 74.75 Verkehrsplanung, Verkehrspolitik