Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model

Analysts must include the status quo (SQ) option as one of the alternatives in the Choice Experiments (CE) technique to ensure the technique is consistent with the Hicksian welfare analysis. However, it comes at a price. Usually, respondents choose the option not because it provides the highest ut...

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Main Authors:	Bakti Hasan-Basri, Nurul Huda Yahya, Rusmani Musa
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2013
Online Access:	http://journalarticle.ukm.my/8099/ http://journalarticle.ukm.my/8099/ http://journalarticle.ukm.my/8099/1/5582-13431-1-SM.pdf

id	ukm-8099
recordtype	eprints
spelling	ukm-80992016-12-14T06:46:12Z http://journalarticle.ukm.my/8099/ Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model Bakti Hasan-Basri, Nurul Huda Yahya, Rusmani Musa, Analysts must include the status quo (SQ) option as one of the alternatives in the Choice Experiments (CE) technique to ensure the technique is consistent with the Hicksian welfare analysis. However, it comes at a price. Usually, respondents choose the option not because it provides the highest utility but to avoid making difficult decisions or to protest the attributes trade-off. One solution for investigating the effect of the SQ option is through the inclusion of the alternative specific constant (ASC) in an estimation model. However, the solution is not applicable for an estimation model that has no ASC. In the present study, the heteroscedastic extreme value (HEV) model is applied to investigate the affect of the SQ effect on preference uncertainty. By analysing respondents’ preferences relating to attributes at recreational parks, the results suggest that more uncertainty exists in the SQ option, while less uncertainty exists in the hypothetical alternatives. Penerbit Universiti Kebangsaan Malaysia 2013 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/8099/1/5582-13431-1-SM.pdf Bakti Hasan-Basri, and Nurul Huda Yahya, and Rusmani Musa, (2013) Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model. Jurnal Ekonomi Malaysia, 47 (1). pp. 163-172. ISSN 0127-1962 http://ejournal.ukm.my/jem/index
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	Analysts must include the status quo (SQ) option as one of the alternatives in the Choice Experiments (CE) technique to ensure the technique is consistent with the Hicksian welfare analysis. However, it comes at a price. Usually, respondents choose the option not because it provides the highest utility but to avoid making difficult decisions or to protest the attributes trade-off. One solution for investigating the effect of the SQ option is through the inclusion of the alternative specific constant (ASC) in an estimation model. However, the solution is not applicable for an estimation model that has no ASC. In the present study, the heteroscedastic extreme value (HEV) model is applied to investigate the affect of the SQ effect on preference uncertainty. By analysing respondents’ preferences relating to attributes at recreational parks, the results suggest that more uncertainty exists in the SQ option, while less uncertainty exists in the hypothetical alternatives.
format	Article
author	Bakti Hasan-Basri, Nurul Huda Yahya, Rusmani Musa,
spellingShingle	Bakti Hasan-Basri, Nurul Huda Yahya, Rusmani Musa, Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model
author_facet	Bakti Hasan-Basri, Nurul Huda Yahya, Rusmani Musa,
author_sort	Bakti Hasan-Basri,
title	Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model
title_short	Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model
title_full	Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model
title_fullStr	Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model
title_full_unstemmed	Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model
title_sort	status quo effect and preferences uncertainty: a heteroscedastic extreme value (hev) model
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2013
url	http://journalarticle.ukm.my/8099/ http://journalarticle.ukm.my/8099/ http://journalarticle.ukm.my/8099/1/5582-13431-1-SM.pdf
first_indexed	2023-09-18T19:51:31Z
last_indexed	2023-09-18T19:51:31Z
_version_	1777406250872471552

Status quo effect and preferences uncertainty: a heteroscedastic extreme value (HEV) model

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