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A DIRECT MEASURE OF THE VALUE OF CHOICE‐FREEDOM
Author(s) -
Miyagi Toshihiko,
Morisugi Hisa
Publication year - 1996
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.1996.tb00657.x
Subject(s) - freedom of choice , degrees of freedom (physics and chemistry) , consumer choice , entropy (arrow of time) , value (mathematics) , measure (data warehouse) , variety (cybernetics) , mathematics , economics , econometrics , mathematical economics , microeconomics , statistics , computer science , physics , thermodynamics , database , market economy
The value of choice‐freedom is a measurement of the variety of choice of an individual and is defined as the maximum amount a consumer would be willing to pay for the option which is infrequently or not at all used by the consumer. This paper shows that the value of choice‐freedom can be derived from random utility theory and measured by art entropy defined by choice probabilities. In addition, the interrelationships among choice‐freedom, average utility and indirect utility is unified into only one equation, called the choice equation, and its properties are examined.