Testing reference dependence, loss aversion and diminishing sensitivity in Spanish tourism
- Autores: Juan Luis Nicolau Gonzálbez
- Localización: Investigaciones económicas, ISSN 0210-1521, Vol. 32, Nº 2, 2008, págs. 231-255
- Idioma: inglés
- Texto completo no disponible (Saber más ...)
- Dialnet Métricas: 1 Cita
-
Resumen
Based on Tversky and Kahneman¿s Prospect Theory, we test the existence of reference dependence, loss aversion and diminishing sensitivity in Spanish tourism. To do this, we incorporate the reference-dependent model into a Multinomial Logit Model with Random Parameters -which controls for heterogeneity- and apply it to a sample of vacation choices made by Spaniards. We find that the di..erence between reference price and actual price is considered to make decisions, confirming that reference dependence exists; that people react more strongly to price increases than to price decreases relative to their reference price, which represents evidence in favor of the loss aversion phenomenon;
and that there is diminishing sensitivity for losses only, showing convexity for these negative values.
