Changing with the Tide: Semiparametric Estimation of Preference Dynamics

Thijs Dekker (), Paul Koster and Roy Brouwer

Land Economics, 2014, vol. 90, issue 4, 717-745

Abstract: 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-codes: C14 Q51 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Changing with the Tide: Semi-Parametric Estimation of Preference Dynamics (2013)
Working Paper: Changing with the tide: Semi-parametric estimation of preference dynamics (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:90:y:2014:i:4:p:717-745

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