RT Journal Article
SR Electronic
T1 Changing with the Tide: Semiparametric Estimation of Preference Dynamics
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 717
OP 745
DO 10.3368/le.90.4.717
VO 90
IS 4
A1 Thijs Dekker
A1 Paul Koster
A1 Roy Brouwer
YR 2014
UL http://le.uwpress.org/content/90/4/717.abstract
AB We contrast the discovered preference hypothesis against the theory of coherent arbitrariness in a split-sample stated choice experiment on flood-risk exposure. A semiparametric local multinomial logit model is developed as an alternative to the Swait and Louviere (1993) test procedure controlling for preference dynamics within and between samples. The proposed model supports the discovered preference hypothesis by means of a decaying starting point bias. The Swait and Louviere (1993) test procedure reaches a different conclusion. It rejects the assumption of stable preferences, but most preference dynamics tend to be smoothed out, causing a more erratic pattern of preference dynamics. (JEL C14, Q51)