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Status quo effect and preferences uncertainty: A Heteroscedastic Extreme Value (HEV) model


Hasan Basri, Bakti and Yahya, Nurul Huda and Musa, Rusmani (2013) Status quo effect and preferences uncertainty: A Heteroscedastic Extreme Value (HEV) model. Jurnal Ekonomi Malaysia, 47 (1). pp. 163-172. ISSN 0126-1962

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Abstract

Analysts must include the status quo (SQ) option as one of the alternatives in the Choice Experiments (CE) technique to ensure the technique is consistent with the Hicksian welfare analysis. However, it comes at a price.Usually, respondents choose the option not because it provides the highest utility but to avoid making difficult decisions or to protest the attributes trade-off. One solution for investigating the effect of the SQ option is through the inclusion of the alternative specific constant (ASC) in an estimation model.However, the solution is not applicable for an estimation model that has no ASC.In the present study, the heteroscedastic extreme value (HEV) model is applied to investigate the affect of the SQ effect on preference uncertainty.By analysing respondents’ preferences relating to attributes at recreational parks, the results suggest that more uncertainty exists in the SQ option, while less uncertainty exists in the hypothetical alternatives.

Item Type: Article
Additional Information: Malay title: Kesan status quo dan ketidakpastian pilihan: Satu model Nilai Melampau Heterogedastik(HEV)
Uncontrolled Keywords: Choice Experiment (CE), status quo, preferences, Heteroscedastic Extreme Value (HEV
Subjects: H Social Sciences > HG Finance
Divisions: School of Economics, Finance & Banking
Depositing User: Dr. Bakti Hasan Basri
Date Deposited: 15 Jul 2015 06:36
Last Modified: 18 Apr 2016 04:04
URI: http://repo.uum.edu.my/id/eprint/14856

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