Combining mixed logit models and random effects models to identify the determinants of willingness to pay for rural landscape improvements
AbstractThis paper reports the findings from a discrete choice experiment study 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. In a different vein from analysis conducted in previous discrete choice experiment studies, this paper uses random effects models for panel data 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 considerably more validity and explanatory power to welfare estimates
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Bibliographic InfoPaper provided by Agricultural Economics Society in its series 81st Annual Conference, April 2-4, 2007, Reading University with number 7975.
Date of creation: 2007
Date of revision:
Agri-environment; discrete choice experiments; mixed logit; panel data; random effects; willingness to pay; Demand and Price Analysis; Environmental Economics and Policy; C33; C35; Q24; Q51;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-10-21 (Agricultural Economics)
- NEP-ALL-2008-10-21 (All new papers)
- NEP-DCM-2008-10-21 (Discrete Choice Models)
- NEP-ECM-2008-10-21 (Econometrics)
- NEP-ENV-2008-10-21 (Environmental Economics)
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