Income effects, cost damping and the value of time: theoretical properties embedded within practical travel choice models

Batley, Richard

doi:10.1007/s11116-016-9744-0

Cited by 2 publications

(1 citation statement)

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“…easy access). 1 The incorporation of RRM in the NLOGIT and Latent GOLD software packages (EconometricSoftware 2012; Vermunt and Magidson 2014), and its inclusion in the second edition of the Applied Choice Analysis textbook (Hensher et al 2015), can be considered evidence of the growing interest in RRM among scholars and practitioners, including those in the field of environmental economics (e.g., Thiene et al, 2012;Boeri et al, 2012;Adamowicz et al, 2014). This provides a context for exploring to what extent meaningful welfare measures can be derived for RRM models, something which is especially important in the field of environmental economics.…”

Section: Introductionmentioning

confidence: 99%

Consumer surplus for random regret minimisation models

Dekker

Chorus

2018

Journal of Environmental Economics and Policy

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This paper is the first to develop a measure of consumer surplus for the Random Regret Minimisation (RRM) model. Following a not so well-known approach proposed two decades ago, we measure (changes in) consumer surplus by studying (changes in) observed behaviour, i.e. the choice probability, in response to price (changes). We interpret the choice probability as a well-behaved approximation of the probabilistic demand curve and accordingly measure the consumer surplus as the area underneath this demand curve. The developed welfare measure enables researchers to assign a measure of consumer surplus to specific alternatives in the context of a given choice set. Moreover, we are able to value changes in the non-price attributes of a specific alternative. We illustrate how differences in consumer surplus between random regret and random utility models follow directly from the differences in their behavioural premises.

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Section: Introductionmentioning

confidence: 99%