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The Estimation of Indifference Maps by Expected Utility Analysis
Jeff Bennett and Ben Smith
American Journal of Agricultural Economics
Vol. 67, No. 4 (Nov., 1985), pp. 833-838
Stable URL: http://www.jstor.org/stable/1241823
Page Count: 6
You can always find the topics here!Topics: Lotteries, Utility functions, Additivity, Expected utility, Indifference maps, Marginal utility, Ambivalence, Consistent estimators, Movies
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The indifference curve estimation procedure proposed and used by Sinden to value nonmarketed goods implicitly adopts the assumption that a two-good utility function can be obtained by the simple addition of two single-good utility functions. The results of two experiments indicate that using the strict additivity assumption is likely to bias the indifference maps so derived. While an alternative nonadditive technique is proposed, it is found that, as with Sinden's technique, it is subject to such a large degree of respondent inconsistency that doubt is cast on the usefulness of the results obtained and on the practicality of this general approach.
American Journal of Agricultural Economics © 1985 Agricultural & Applied Economics Association