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An Application of Mixed Logit Estimation in the Analysis of Producers’ Stated Preferences

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  • Kipperberg, Gorm
  • Bond, Craig A.
  • Hoag, Dana L.
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    Abstract

    This paper analyzes Colorado Corn producers’ preferences over both private- and environmental public-good production system attributes. Current production practices are characterized by intensive water and chemical use, resulting in non-point source pollution to water bodies as well as soil erosion problems. Data from a stated preference survey are employed to analyze key attributes of experimentally configured irrigation systems, proposed as alternatives to current practices. Panel mixed logit estimations find positive preferences for profit, risk reduction, and, importantly, systems with less environmental impact in terms of nitrate leaching and soil erosion. The results also find presence of significant preference heterogeneity and a complementary relationship between the two environmental attributes. Analysis of this kind can be used by policy makers to predict behavioral responses associated with introduction of new technologies, or to assess welfare implications of agricultural policy changes and stricter environmental regulations.

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    Bibliographic Info

    Paper provided by Colorado State University, Department of Agricultural and Resource Economics in its series Working Papers with number 108719.

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    Date of creation: Dec 2008
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    Handle: RePEc:ags:csdawp:108719

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    Keywords: Agricultural production; profit-maximization; environment; mixed logit; stated preference; attribute part-worth; nitrate leaching; soil erosion; risk; Crop Production/Industries; C10; D62; Q12; Q15; Q51;

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