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Model selection for the mixed logit with Bayesian estimation

  • Balcombe, Kelvin
  • Chalak, Ali
  • Fraser, Iain

In this paper, the mixed logit (ML) using Bayesian methods was employed to examine willingness-to-pay (WTP) to consume bread produced with reduced levels of pesticides so as to ameliorate environmental quality, from data generated by a choice experiment. Model comparison used the marginal likelihood, which is preferable for Bayesian model comparison and testing. Models containing constant and random parameters for a number of distributions were considered, along with models in 'preference space' and 'WTP space' as well as those allowing for misreporting. We found: strong support for the ML estimated in WTP space; little support for fixing the price coefficient a common practice advocated and adopted in the environmental economics literature; and, weak evidence for misreporting.

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Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 57 (2009)
Issue (Month): 2 (March)
Pages: 226-237

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Handle: RePEc:eee:jeeman:v:57:y:2009:i:2:p:226-237
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622870

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