The authors describe a procedure for the measurement and estimation of consumer preferences under uncertainty. Measurement aspects of vonNeumann-Morgenstern utility theory are used in conjunction with ordinary least squares estimation to assess attribute importances and consumer utility functions at the individual level. The relative efficacy of these statistically estimated functions and their algebraically derived counterparts which have appeared in the marketing literature are discussed and empirically compared. The authors also illustrate how the measurements can be used to estimate a coefficient of relative risk aversion to segment consumers on the basis of their risk attitudes toward the product category.
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