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

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Danny Campbell

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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. Copyright 2007 The Agricultural Economics Society.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1477-9552.2007.00117.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Agricultural Economics.

Volume (Year): 58 (2007)
Issue (Month): 3 (09)
Pages: 467-483
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Handle: RePEc:bla:jageco:v:58:y:2007:i:3:p:467-483

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  1. Kragt, Marit E. & Bennett, J.W., 2009. "Using choice experiments to value river and estuary health in Tasmania with individual preference heterogeneity," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48058, Australian Agricultural and Resource Economics Society. [Downloadable!]
    Other versions:
  2. Marit E Kragt & Jeff Bennett, . "What’s appropriate? Investigating the Effects of Attribute Level Framing and Changing Cost Levels in Choice Experiments," Environmental Economics Research Hub Research Reports 0917, Environmental Economics Research Hub, Crawford School, Australian National University. [Downloadable!]
  3. Chung, Chanjin & Briggeman, Brian & Han, Sungill, 2008. "Willingness to Pay for Beef Quality Attributes: Combining Mixed Logit and Latent Segmentation Approach," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6411, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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