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Willingness to Pay for Rural Landscape Improvements: Combining Mixed Logit and Random‐Effects Models

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  • Danny Campbell

Abstract

This paper reports the findings from a discrete‐choice experiment designed to estimate the economic benefits associated with rural landscape improvements in Ireland. Using a mixed logit model, the panel nature of the dataset is exploited to retrieve willingness‐to‐pay values for every individual in the sample. This departs from customary approaches in which the willingness‐to‐pay estimates are normally expressed as measures of central tendency of an a priori distribution. Random‐effects models for panel data are subsequently used to identify the determinants of the individual‐specific willingness‐to‐pay estimates. In comparison with the standard methods used to incorporate individual‐specific variables into the analysis of discrete‐choice experiments, the analytical approach outlined in this paper is shown to add considerable explanatory power to the welfare estimates.

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  • Danny Campbell, 2007. "Willingness to Pay for Rural Landscape Improvements: Combining Mixed Logit and Random‐Effects Models," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 467-483, September.
    • Handle: RePEc:bla:jageco:v:58:y:2007:i:3:p:467-483
    DOI: 10.1111/j.1477-9552.2007.00117.x
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    1. Stephane Hess & John Polak, 2003. "An alternative method to the scrambled Halton sequence for removing correlation between standard Halton sequences in high dimensions," ERSA conference papers ersa03p406, European Regional Science Association.
    2. Nerlove,Marc, 2005. "Essays in Panel Data Econometrics," Cambridge Books, Cambridge University Press, number 9780521022460.
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