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A Censored Random Coefficients Model For Pooled Survey Data With Application To The Estimation Of Power Outage Costs

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  • Klaus Moeltner
  • David F. Layton

Abstract

In many surveys, multiple observations on the dependent variable are collected from a given respondent. The resulting pooled data set is likely to be censored and to exhibit cross-sectional heterogeneity. We propose a model that addresses both issues by allowing regression coefficients to vary randomly across respondents and by using the GewekeHajivassiliou-Keane simulator and Halton sequences to estimate highorder probabilities. We show how this framework can be usefully applied to the estimation of power outage costs to firms using data from a recent survey conducted by a U.S. utility. Our results strongly reject the hypotheses of parameter constancy and cross-sectional homogeneity. © 2002 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 84 (2002)
Issue (Month): 3 (August)
Pages: 552-561

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Handle: RePEc:tpr:restat:v:84:y:2002:i:3:p:552-561

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Cited by:
  1. Carlsson, Fredrik & Martinsson, Peter & Akay, Alpaslan, 2011. "The effect of power outages and cheap talk on willingness to pay to reduce outages," Energy Economics, Elsevier, Elsevier, vol. 33(5), pages 790-798, September.
  2. Xue, Hong & Mainville, Denise Y. & You, Wen & Nayga, Rodolfo M., Jr., 2009. "Nutrition Knowledge, Sensory Characteristics and Consumers’ Willingness to Pay for Pasture-Fed Beef," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin, Agricultural and Applied Economics Association 49277, Agricultural and Applied Economics Association.
  3. Reichl, Johannes & Kollmann, Andrea & Tichler, Robert & Schneider, Friedrich, 2008. "The importance of incorporating reliability of supply criteria in a regulatory system of electricity distribution: An empirical analysis for Austria," Energy Policy, Elsevier, Elsevier, vol. 36(10), pages 3862-3871, October.
  4. Aygul Ozbafli & Glenn Jenkins, 2013. "Estimating Willingness To Pay For Reliable Electricity Supply: A Choice Experiment Study," Development Discussion Papers, JDI Executive Programs 2013-01, JDI Executive Programs.
  5. Johannes Reichl & Sylvia Frühwirth-Schnatter, 2012. "A censored random coefficients model for the detection of zero willingness to pay," Quantitative Marketing and Economics, Springer, Springer, vol. 10(2), pages 259-281, June.
  6. Siikamäki, Juha & Layton, David, 2005. "Incentive Payment Programs for Environmental Protection: A Framework for Eliciting and Estimating Landowners' Willingness to Participate," Discussion Papers, Resources For the Future dp-05-57, Resources For the Future.
  7. Mark Lijesen, 2004. "Increasing the reliability of electricity production: a cost-benefit analysis," CPB Document, CPB Netherlands Bureau for Economic Policy Analysis 52, CPB Netherlands Bureau for Economic Policy Analysis.
  8. Carlsson, Fredrik & Martinsson, Peter, 2006. "Do Experience and Cheap Talk influence Willingness to Pay in an Open-Ended Contingent Valuation Survey?," Working Papers in Economics, University of Gothenburg, Department of Economics 190, University of Gothenburg, Department of Economics.

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