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Controlling for the effects of information in a public goods discrete choice model

Author

Listed:
  • Mikolaj Czajkowski

    (Faculty of Economic Sciences, University of Warsaw, Poland)

  • Nick Hanley

    (School of Geography and Sustainable Development, University of St. Andrews)

  • Jacob LaRiviere

    (Department of Economics, University of Tennessee)

Abstract

This paper develops a reduced form method of controlling for differences in information sets of subjects in public good discrete choice models, using stated preference data. The main contribution of our method comes from accounting for the effect of information provided during a survey on the mean and the variance of individual-specific scale parameters. In this way we incorporate both scale heterogeneity as well as observed and unobserved preference heterogeneity to investigate differences across an d within information treatments. Our approach will also be useful to researchers who want to combine stated preference data sets while controlling for scale differences. We illustrate our approach using the data from a discrete choice experiment study of a biodiversity conservation program and find that the mean of individual -specific scale parameters and its variance in the sample is sensitive to the information set provided to the respondents.

Suggested Citation

  • Mikolaj Czajkowski & Nick Hanley & Jacob LaRiviere, 2014. "Controlling for the effects of information in a public goods discrete choice model," Discussion Papers in Environment and Development Economics 2014-04, University of St. Andrews, School of Geography and Sustainable Development.
    • Handle: RePEc:sss:wpaper:2014-04
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    More about this item

    Keywords

    information; uncertainty; choice modelling; information effects; scale; scale heterogeneity; G-MNL; combined datasets;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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