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Skew and attribute non-attendance within the Bayesian mixed logit model

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  • Balcombe, Kelvin
  • Burton, Michael
  • Rigby, Dan

Abstract

We investigate non-attendance to choice set attributes and the accommodation of preference heterogeneity within the mixed logit model. We propose a generalisation of the mixed logit enabling the degree of skew of marginal utility distributions to be estimated. The implementation is Bayesian with the marginal likelihood used as an arbiter of model performance. We find strong evidence of skew in the distributions of marginal utilities for most attributes. Models incorporating skew are preferred in all cases. The irrelevance of an attribute to significant numbers of respondents is a possible cause of such skew. We test alternative empirical accommodations of self-reported attribute non-attendance (ANA) and continue to find strong evidence of skew in the distributions of marginal utilities even having accounted for ANA. We find that, contrary to some recent findings, respondents who report having ignored an attribute typically do indeed have a zero marginal utility for that attribute.

Suggested Citation

  • Balcombe, Kelvin & Burton, Michael & Rigby, Dan, 2011. "Skew and attribute non-attendance within the Bayesian mixed logit model," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 446-461.
    • Handle: RePEc:eee:jeeman:v:62:y:2011:i:3:p:446-461
    DOI: 10.1016/j.jeem.2011.04.004
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    References listed on IDEAS

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    1. Danny Campbell & W. Hutchinson & Riccardo Scarpa, 2008. "Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(3), pages 401-417, November.
    2. Scarpa, Riccardo & Rose, John M., 2008. "Design efficiency for non-market valuation with choice modelling: how to measure it, what to report and why," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 1-30.
    3. Riccardo Scarpa & Mara Thiene & Francesco Marangon, 2008. "Using Flexible Taste Distributions to Value Collective Reputation for Environmentally Friendly Production Methods," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(2), pages 145-162, June.
    4. Michael Burton & Dan Rigby & Trevor Young, 2001. "Consumer attitudes to genetically modified organisms in food in the UK," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(4), pages 479-498, December.
    5. Dan Rigby & Kelvin Balcombe & Michael Burton, 2009. "Mixed Logit Model Performance and Distributional Assumptions: Preferences and GM foods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(3), pages 279-295, March.
    6. Kjartan Sælensminde, 2001. "Inconsistent choices in Stated Choice data;Use of the logit scaling approach to handle resulting variance increases," Transportation, Springer, vol. 28(3), pages 269-296, August.
    7. David Hensher & John Rose & William Greene, 2005. "The implications on willingness to pay of respondents ignoring specific attributes," Transportation, Springer, vol. 32(3), pages 203-222, May.
    8. Balcombe, Kelvin & Chalak, Ali & Fraser, Iain, 2009. "Model selection for the mixed logit with Bayesian estimation," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 226-237, March.
    9. Riccardo Scarpa & Timothy J. Gilbride & Danny Campbell & David A. Hensher, 2009. "Modelling attribute non-attendance in choice experiments for rural landscape valuation," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(2), pages 151-174, June.
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