The effects of experience on preference uncertainty: theory and empirics for environmental goods

Mikolaj Czajkowski, Nick Hanley and Jacob LaRiviere

No 152155, 2013 Conference (57th), February 5-8, 2013, Sydney, Australia from Australian Agricultural and Resource Economics Society

Abstract: This paper develops a model of demand estimation in which consumers learn about their true preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two quasi-public goods. We find that the predictions of the theoretical exercise that additional experience with a good will make consumers more certain over their preferences in both mean and variance are supported in each case.

Keywords: Environmental Economics and Policy; Institutional and Behavioral Economics; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 35
Date: 2013-02
New Economics Papers: this item is included in nep-dcm and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare13:152155

DOI: 10.22004/ag.econ.152155

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