Response bias in a conjoint analysis of power outages

A methodology is proposed for estimating 'status quo effects' (resistance to change) and 'loss aversion' (willingness to pay is less than willingness to accept) from consumer survey data. Conjoint data on Israeli households' attitudes to electricity outages reveal that both of these effects are pronounced and that they depend on the interviewees' characteristics. Ordered conditional legit estimation indicates that while the estimates are rank sensitive the suggested methodology continues to be applicable. Finally, the conjoint estimates are compared with those obtained by applying the method of contingent valuation. (C) 1998 Elsevier Science B.V.