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Design efficiency for non-market valuation with choice modelling: how to measure it, what to report and why

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  • Scarpa, Riccardo
  • Rose, John M.

Abstract

We review the basic principles for the evaluation of design efficiency in discrete choice modelling with a focus on efficiency of WTP estimates from the multinomial logit model. The discussion is developed under the realistic assumption that researchers can plausibly define a prior belief on the range of values for the utility coefficients. D-,A-,B-,Sand Cerrors are compared as measures of design performance in applied studies and their rationale is discussed. An empirical example based on the generation and comparison of fifteen separate designs from a common set of assumptions illustrates the relevant considerations to the context of non-market valuation, with particular emphasis placed on Cefficiency. Conclusions are drawn for the practice of reporting in non-market valuation and for future work on design research

Suggested Citation

  • 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), September.
  • Handle: RePEc:ags:aareaj:118543
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    References listed on IDEAS

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    Keywords

    Resource /Energy Economics and Policy;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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