Loss Aversion and Individual Characteristics

TY - JOUR

T1 - Loss Aversion and Individual Characteristics

AU - Hjorth, Katrine

AU - Fosgerau, Mogens

PY - 2011/8

Y1 - 2011/8

N2 - Many studies have shown that loss aversion affects the valuation of non-market goods. Using stated choice data, this paper presents an empirical investigation of how individual-level loss aversion varies with observable personal characteristics and with the choice context. We investigate loss aversion with respect to travel time and money, and find significant loss aversion in both dimensions. The degree of loss aversion in the time dimension is larger than in the money dimension, and depends on age and education. Subjects tend to be more loss averse when the reference is well established.

AB - Many studies have shown that loss aversion affects the valuation of non-market goods. Using stated choice data, this paper presents an empirical investigation of how individual-level loss aversion varies with observable personal characteristics and with the choice context. We investigate loss aversion with respect to travel time and money, and find significant loss aversion in both dimensions. The degree of loss aversion in the time dimension is larger than in the money dimension, and depends on age and education. Subjects tend to be more loss averse when the reference is well established.

KW - Discrete choice model

KW - Fixed effects logit estimator

KW - Loss aversion

KW - Non-market goods

KW - Stated preference data

UR - http://www.scopus.com/inward/record.url?scp=79960130274&partnerID=8YFLogxK

U2 - 10.1007/s10640-010-9455-5

DO - 10.1007/s10640-010-9455-5

M3 - Journal article

AN - SCOPUS:79960130274

SN - 0924-6460

VL - 49

SP - 573

EP - 596

JO - Environmental and Resource Economics

JF - Environmental and Resource Economics

IS - 4

ER -