A DIRECT MEASURE OF THE VALUE OF CHOICE‐FREEDOM

Toshihiko Miyagi and Hisa Morisugi

Papers in Regional Science, 1996, vol. 75, issue 2, 121-134

Abstract: ABSTRACT The value of choice‐freedom is a measurement of the variety of choice of an individual and is defined as the maximum amount a consumer would be willing to pay for the option which is infrequently or not at all used by the consumer. This paper shows that the value of choice‐freedom can be derived from random utility theory and measured by art entropy defined by choice probabilities. In addition, the interrelationships among choice‐freedom, average utility and indirect utility is unified into only one equation, called the choice equation, and its properties are examined.

Date: 1996
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https://doi.org/10.1111/j.1435-5597.1996.tb00657.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:presci:v:75:y:1996:i:2:p:121-134

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