Loss aversion does disappear and reverse, although estimates of lambda (λ) are not reliable: Reply to André and De Langhe

Walasek and Stewart (2015) demonstrated that loss aversion estimated from fitting accept-reject choice data from a set of 50/50 gambles can be made to disappear or even reverse by manipulating the range of gains and losses experienced in different conditions. André and de Langhe (2020) critique this conclusion because in estimating loss aversion on different choice sets, Walasek and Stewart (2015) have violated measurement invariance. They show, and we agree, that when loss aversion is estimated on the choices common to all conditions there is no difference in prospect theory’s λ parameter. But there are two problems here. First, while there are no differences in λs across conditions, there are very large differences in the proportion of the common gambles that are accepted, which André and de Langhe chose not to report. These choice proportion differences are consistent with decision by sampling (but are inconsistent with prospect theory or any of the alternative mechanisms proposed by André and de Langhe, 2020). Second, we demonstrate a much more general issue related to the issue of measurement invariance: that λ estimated from the accept-reject choices is extremely unreliable and does not generalise even across random splits within large, balanced choice sets. It is therefore not possible to determine whether differences in choice proportions are due to loss aversion or to a bias in accepting or rejecting mixed gambles. We conclude that context has large effects on the acceptance of mixed gambles and that it is futile to estimate λ from accept-reject choices.

Investigating the origin and consequences of endogenous default options in repeated economic choices

Classical value-based decision theories state that economic choices are solely based on the value of available options. Experimental evidence suggests, however, that individuals’ choices are biased towards default options, prompted by the framing of decisions. Although the effects of default options created by exogenous framing – such as how choice options are displayed – are well-documented, little is known about the potential effects and properties of endogenous framing, that is, originating from an individual’s internal state. In this study, we investigated the existence and properties of endogenous default options in a task involving choices between risky lotteries. By manipulating and examining the effects of three experimental features – time pressure, time spent on task and relative choice proportion towards a specific option –, we reveal and dissociate two features of endogenous default options which bias individuals’ choices: a natural tendency to prefer certain types of options (natural default), and the tendency to implicitly learn a default option from past choices (learned default). Additional analyses suggest that while the natural default may bias the standard choice process towards an option category, the learned default effects may be attributable to a second independent choice process. Overall, these investigations provide a first experimental evidence of how individuals build and apply diverse endogenous default options in economic decision-making and how this biases their choices.

Determinants of forest land use decisions among rural farm households in south-western Nigeria

The study examined factors determining forest land use decisions among rural farm households in south-western Nigeria. Primary data on socio-economic and community characteristics as well as land use systems were obtained from 300 farm households using a structured questionnaire through a multistage sampling technique. The study revealed that marital status (P < 0.01), gender (P < 0.01), land tenure security (P < 0.01), dominant crop type (P < 0.05), and preference for tree on farm land (P < 0.01) are factors influencing forest land use decision in either agroforestry, pure cultivation or in both practices. Land use choice proportion estimation shows that 63 % are still willing to retain their existing land use practice (pure cultivation). A total of 32 % are willing to shift completely from their existing land use practice while 4 % of the respondents are willing to practice both “agroforestry and pure cultivation” simultaneously. The study therefore suggests the need for a change in forest land use policy, particularly, with a view influence the pattern of use, limitation on type of crop that can be grown, and compliance to sustainable land use practice. This would go a long way in driving forest land use towards agroforestry – a practice identified as a means of ensuring food security while ensuring safe environment.

Determinants of forest land use decisions among rural farm households in south-western Nigeria

The study examined factors determining forest land use decisions among rural farm households in south-western Nigeria. Primary data on socio-economic and community characteristics as well as land use systems were obtained from 300 farm households using a structured questionnaire through a multistage sampling technique. The study revealed that marital status (P < 0.01), gender (P < 0.01), land tenure security (P < 0.01), dominant crop type (P < 0.05), and preference for tree on farm land (P < 0.01) are factors influencing forest land use decision in either agroforestry, pure cultivation or in both practices. Land use choice proportion estimation shows that 63 % are still willing to retain their existing land use practice (pure cultivation). A total of 32 % are willing to shift completely from their existing land use practice while 4 % of the respondents are willing to practice both “agroforestry and pure cultivation” simultaneously. The study therefore suggests the need for a change in forest land use policy, particularly, with a view influence the pattern of use, limitation on type of crop that can be grown, and compliance to sustainable land use practice. This would go a long way in driving forest land use towards agroforestry – a practice identified as a means of ensuring food security while ensuring safe environment.

Feeding behaviour and diet choices and diet choices of cattle with physical and temporal constraints on forage accessibility: an indoor experiment

An indoor choice experiment was conducted to assess the extent to which heifers offered two forages of different quality will attempt to consume the better quality forage when the weight/number of constraints applied on its harvesting increase. The experiment involved six Salers heifers, a leafy (L) and a coarse (C) hay, and two combined or single accessibility constraints. A physical constraint consisted of reducing the prehensibility of L by covering the trough with a steel grid of either 4 cm or 6 cm mesh size (L4 or L6 v. L ∞ for no grid). A temporal constraint limited the daily access time to both hays to 4 v. 24 h. The hays were either offered alone or together over 2-week periods. Dry-matter intake and feeding time were recorded daily.As expected, the physical constraint (only L4 was efficient) made the heifers decrease their choice (proportion of feeding time or intake) for L regardless of access time, whereas the temporal constraint had no significant effect on choice. The heifers greatly modulated their intake rate of L even under strong physical constraint (L4), and then unexpectedly managed to ingest L faster than C. This emphasizes their motivation to keep ingesting the better quality forage, and underlines the difficulties in comparing diet choices with the optimal foraging theory predictions based on the relative values of a behavioural component subject to large variation, i.e. intake rate. In a very constraining situation (L4 and 4-h access), heifers made a choice that allowed them to increase their total daily digestible organic matter (DOM) intake compared with L4 or C offered alone because of an inverse relationship between feeding time and intake rate on L4. They did not however maximize their total daily DOM intake in a less constraining situation (L ∞ or L6 and C, with 4-h access), since they did not consume L exclusively and showed a marked preference for a mixed diet.