The "more is less" phenomenon in Contingent and Inferred valuation

2011) using the Contingent valuation (CV) as well as the Inferred valuation (IV) method (Lusk and Norwood 2009b). We find that when moving in the context of a familiar market for consumers (i.e., the food market) we only observe weak effects of inconsistencies. In addition, we find that the IV method is no better (and no worse) than the CV method in generating more consistent preference orderings. Surprisingly, we also find that the IV method generates higher valuations than CV, rendering one of its advantages of mitigating social desirability bias questionable.willingness-to-pay (WTP), Contingent Valuation (CV), Inferred Valuation(IV), preference reversals, Resource /Energy Economics and Policy, C9, C93, D12, Q51,

Heteroskedasticity, the single crossing property and ordered response models

Heteroskedasticity in ordered response models has not garnered enough attention in the literature. Econometric software packages do not handle this problem satisfactorily either. We provide formulas to calculate heteroskedasticity corrected marginal effects and discrete changes using an approach that deals with single crossing property, a very restrictive assumption of ordered response models.

Food involvement and food purchasing behaviour

This paper investigates the factors affecting product class involvement for food. Factors affecting specific aspects of involvement are also explored. The aim is to determine the factors that affect involvement with food and sketch the profile of consumers more likely to be involved or not involved with food. Building on the literature a conceptual model is developed and empirically tested using survey data collected from supermarkets in Athens. Data were analyzed using probit and ordered probit analysis and marginal effects were calculated which show how much the level of involvement or importance is affected when a variable is changed. Results show that younger consumers, those with higher education and income that engage in nutritional label use behaviour and do not prepare food for their household are more likely to have low involvement with food. Less distinctive characteristics are apparent for the highly involved consumers. Different consumer profiles are also associated with different aspects of food involvement based on importance attached to price, ease of preparation, nutrition, taste, and brand name.product class involvement, food involvement, consumer behaviour, food shopping, attribute importance, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,

Body Weight Outcomes and Food Expenditures Among Older Europeans: A simultaneous equation approach

We analyze the inter-relationships between body weight outcomes and food expenditures among older Europeans using a simultaneous equation model. Several statistical tests were conducted to assess endogeneity of selected variables, the exogeneity, relevance, and validity of instruments used, and the identification of the model. Our results generally suggest, contrary to normative views, that food-away-from-home expenditure is negatively related to body mass index (BMI). BMI is negatively related to the percentage of food spent away from home.Body Mass Index, food expenditures, simultaneous equations, Agricultural and Food Policy,

When a risky prospect is valued more than its best possible outcome

In this paper, we document a violation of normative and descriptive models of decision making under risk. In contrast to uncertainty effects found by Gneezy, List and Wu (2006), some subjects in our experiments valued certain lotteries more than the best possible outcome. We show that the likelihood of observing this effect is positively related to the probability of winning the lottery and negatively related to the value of the maximum outcome. We also demonstrate that this effect can be partially attributed to subjects’ competitiveness and level of comprehension of the lottery mechanism; the competitiveness effects far outweighing comprehension effects.lottery, risk, competitiveness, Vickrey auctions

Intertemporal stability of survey-based measures of risk and time preferences over a three-year course

Given the importance of risk and time preferences for economics and other disciplines, we seek to examine the intertemporal stability of six related survey-based measures. Using a panel of subjects over a three-year course, between 2013 and 2015, we find aggregate stability of all six measures over the time span of our data. With few exceptions, the measures also show remarkably high individual stability over the examined period. Our results contribute to the wider adoption of survey-based measures, especially considering the ease with which such measures can be incorporated in large-scale surveys

Intertemporal stability of survey-based measures of risk and time preferences over a three-year course

Given the importance of risk and time preferences for economics and other disciplines, we seek to examine the intertemporal stability of six related survey-based measures. Using a panel of subjects over a three-year course, between 2013 and 2015, we find aggregate stability of all six measures over the time span of our data. With few exceptions, the measures also show remarkably high individual stability over the examined period. Our results contribute to the wider adoption of survey-based measures, especially considering the ease with which such measures can be incorporated in large-scale surveys

Intertemporal stability of survey-based measures of risk and time preferences

Given the importance of risk and time preferences for economics and other disciplines, we seek to examine the intertemporal stability of six related survey-based measures. Using a panel of subjects over three waves, between 2013 and 2015, we find remarkably high aggregate stability over the examined period in all six measures while we observe significant patterns of instability at the individual level. Our results contribute to the discussion on the wider adoption of survey-based measures, especially considering the ease with which such measures can be incorporated in large-scale surveys

Economic rationality under cognitive load

Economic analysis assumes that consumer behavior can be rationalized by a utility function. Previous research has shown that some decision-making quality can be captured by permanent cognitive ability but has not examined how a temporary load in subjects' working memory can affect economic rationality. In a controlled laboratory experiment, we exogenously vary cognitive load by asking subjects to memorize a number while they undertake an induced budget allocation task (Choi et al., 2007a,b). Using a number of manipulation checks, we verify that cognitive load has adverse affects on subjects' performance in reasoning tasks. However, we find no effect in any of the goodness-of-fit measures that measure consistency of subjects' choices with the Generalized Axiom of Revealed Preferences (GARP), despite having a sample size large enough to detect even small differences between treatments with 80% power. We also report no effect on first-order stochastic dominance and risk preferences. Our finding suggests that researchers need not worry about economic rationality breaking down when subjects are placed under temporary working memory load

The effect of olfactory sensory cues on economic decision making

Several studies show that sensory cues influence consumer decision making processes. While scent is a key component of a market's physical environment, it has received far less attention in the academic literature as compared, for example, with visual cues. In addition, most of the studies that examine the effect of ambient scents fail on one or both of these criteria: to properly control the influence of nuisance factors and/or to elicit preferences under real monetary incentives. We collected data from a laboratory experiment where we varied on a between subjects basis the dispersion of a citrus fragrance. We then elicited subjects' willingness to pay for two unbranded products - a mug and a chocolate - by having subjects participate in a 2nd price Vickrey auction. We also elicited subjects' risk preferences using lottery choice tasks. Our results show a statistically and economically significant effect on subjects' willingness to pay: valuations increased between 37% - 43% for subjects who were exposed to a citrus scent as compared to the control group. We do not find a statistically significant effect of the citrus scent on subjects' risk aversion