TY - JOUR PY - 2010// TI - Shift of reference point and implications on behavioral reaction to gains and losses JO - Transportation A1 - Masiero, Lorenzo A1 - Hensher, David A. SP - 249 EP - 271 VL - 38 IS - 2 N2 - It is widely recognized that individual decision-making is subject to the evaluation of gains and losses around a reference point. The estimation of discrete choice models increasingly use data from stated choice experiments which are pivoted around a reference alternative. However, to date, the specification of a reference alternative in transport studies has been fixed, whereas it is common to observe individuals adjusting their preferences according to a change in their reference point. This paper focuses on individual reactions, in a freight choice context, to a negative change in the reference alternative values, identifying the behavioural implications in terms of loss aversion and diminishing sensitivity. The results show a significant adjustment in the valuation of gains and losses around a shifted reference alternative. In particular, we find an average increase in loss aversion for cost and time attributes, and a substantial decrease for punctuality. These findings are translated to significant differences in the willingness to pay and willingness to accept measures, providing supporting evidence of respondents’ behavioural reaction.

LA - SN - 0049-4488 UR - http://dx.doi.org/10.1007/s11116-010-9302-0 ID - ref1 ER -