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Appears in Collections:Economics Working Papers
Title: The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Environmental Goods
Author(s): Czajkowski, Mikolaj
Hanley, Nicholas
LaRiviere, Jacob
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Citation: Czajkowski M, Hanley N & LaRiviere J (2013) The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Environmental Goods. Stirling Economics Discussion Paper, 2013-11.
Keywords: discrete choice experiment
preference learning
stated preferences
Bayesian updating
generalized multinomial logit
scale variance
JEL Code(s): C51: Model Construction and Estimation
D83: Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Q51: Valuation of Environmental Effects
H43: Project Evaluation; Social Discount Rate
Issue Date: 31-Oct-2013
Date Deposited: 4-Nov-2013
Series/Report no.: Stirling Economics Discussion Paper, 2013-11
Abstract: This paper develop and estimates a model of demand estimation for environmental public goods which allows for consumers to learn about their 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 environmental goods. We find that the predictions of the theoretical exercise that additional experience makes consumers more certain over their preferences in both mean and variance are supported in each case.
Type: Working Paper
Affiliation: University of Warsaw
University of Tennessee

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