IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v82y2015icp169-192.html
   My bibliography  Save this article

On finite sample performance of confidence intervals methods for willingness to pay measures

Author

Listed:
  • Gatta, Valerio
  • Marcucci, Edoardo
  • Scaccia, Luisa

Abstract

This paper systematically compares finite sample performances of methods to build confidence intervals for willingness to pay measures in a choice modeling context. It contributes to the field by also considering methods developed in other research fields. Various scenarios are evaluated under an extensive Monte Carlo study. Results show that the commonly used Delta method, producing symmetric intervals around the point estimate, often fails to account for skewness in the estimated willingness to pay distribution. Both the Fieller method and the likelihood ratio test inversion method produce more realistic confidence intervals for small samples. Some bootstrap methods also perform reasonably well, in terms of effective coverage. Finally, empirical data are used to illustrate an application of the methods considered.

Suggested Citation

  • Gatta, Valerio & Marcucci, Edoardo & Scaccia, Luisa, 2015. "On finite sample performance of confidence intervals methods for willingness to pay measures," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 169-192.
    • Handle: RePEc:eee:transa:v:82:y:2015:i:c:p:169-192
    DOI: 10.1016/j.tra.2015.09.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096585641500230X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2015.09.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Marcucci, Edoardo & Gatta, Valerio, 2012. "Dissecting preference heterogeneity in consumer stated choices," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 331-339.
    2. Paul H. Garthwaite & Stephen T. Buckland, 1992. "Generating Monte Carlo Confidence Intervals by the Robbins–Monro Process," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 41(1), pages 159-171, March.
    3. Jean-Thomas Bernard & Nadhem Idoudi & Lynda Khalaf & Clément Yélou, 2007. "Finite sample inference methods for dynamic energy demand models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1211-1226.
    4. Arne Risa Hole, 2007. "A comparison of approaches to estimating confidence intervals for willingness to pay measures," Health Economics, John Wiley & Sons, Ltd., vol. 16(8), pages 827-840, August.
    5. Marsaglia, George, 2006. "Ratios of Normal Variables," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 16(i04).
    6. Daly, Andrew & Hess, Stephane & de Jong, Gerard, 2012. "Calculating errors for measures derived from choice modelling estimates," Transportation Research Part B: Methodological, Elsevier, vol. 46(2), pages 333-341.
    7. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
    8. Valerio Gatta & Edoardo Marcucci, 2014. "Urban Freight Transport Policy Changes: Improving Decision Makers’ Awareness Via An Agent-Specific Approach," Working Papers 0114, CREI Università degli Studi Roma Tre, revised 2014.
    9. Marcucci, Edoardo & Gatta, Valerio & Scaccia, Luisa, 2015. "Urban freight, parking and pricing policies: An evaluation from a transport providers’ perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 74(C), pages 239-249.
    10. Bliemer, Michiel C.J. & Rose, John M., 2013. "Confidence intervals of willingness-to-pay for random coefficient logit models," Transportation Research Part B: Methodological, Elsevier, vol. 58(C), pages 199-214.
    11. Armstrong, Paula & Garrido, Rodrigo & Ortúzar, Juan de Dios, 0. "Confidence intervals to bound the value of time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(2-3), pages 143-161, April.
    12. Krinsky, Itzhak & Robb, A Leslie, 1990. "On Approximating the Statistical Properties of Elasticities: A Correction," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 189-190, February.
    13. Edoardo Marcucci & Valerio Gatta, 2013. "The Intra-Agent Heterogeneity In Urban Freight Distribution: The Case Of Own-Account Operators," Articles, International Journal of Transport Economics, vol. 40(2).
    14. Hirschberg, Joe & Lye, Jenny, 2010. "A Geometric Comparison of the Delta and Fieller Confidence Intervals," The American Statistician, American Statistical Association, vol. 64(3), pages 234-241.
    15. J. Carpenter, 1999. "Test inversion bootstrap confidence intervals," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 61(1), pages 159-172.
    16. Gatta, Valerio & Marcucci, Edoardo, 2014. "Urban freight transport and policy changes: Improving decision makers' awareness via an agent-specific approach," Transport Policy, Elsevier, vol. 36(C), pages 248-252.
    17. Valerio Gatta & Edoardo Marcucci & Luisa Scaccia, 2014. "Willingness To Pay Confidence Interval Estimation Methods: Comparisons And Extensions," Working Papers 0314, CREI Università degli Studi Roma Tre, revised 2014.
    18. Bolduc, Denis & Khalaf, Lynda & Yélou, Clément, 2010. "Identification robust confidence set methods for inference on parameter ratios with application to discrete choice models," Journal of Econometrics, Elsevier, vol. 157(2), pages 317-327, August.
    19. Edoardo Marcucci & Valerio Gatta, 2013. "The Intra-Agent Heterogeneity In Urban Freight Distribution: The Case Of Own-Account Operators," Articles, International Journal of Transport Economics, vol. 40(2).
    20. Gatta, Valerio & Marcucci, Edoardo, 2007. "Quality and public transport service contracts," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 36, pages 92-106.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Scaccia, Luisa & Marcucci, Edoardo & Gatta, Valerio, 2023. "Prediction and confidence intervals of willingness-to-pay for mixed logit models," Transportation Research Part B: Methodological, Elsevier, vol. 167(C), pages 54-78.
    2. Daziano, Ricardo A. & Achtnicht, Martin, 2014. "Accounting for uncertainty in willingness to pay for environmental benefits," Energy Economics, Elsevier, vol. 44(C), pages 166-177.
    3. Marcucci, Edoardo & Le Pira, Michela & Gatta, Valerio & Inturri, Giuseppe & Ignaccolo, Matteo & Pluchino, Alessandro, 2017. "Simulating participatory urban freight transport policy-making: Accounting for heterogeneous stakeholders’ preferences and interaction effects," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 103(C), pages 69-86.
    4. Marcucci, Edoardo & Gatta, Valerio, 2017. "Investigating the potential for off-hour deliveries in the city of Rome: Retailers’ perceptions and stated reactions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 142-156.
    5. Carson, Richard T. & Czajkowski, Mikołaj, 2019. "A new baseline model for estimating willingness to pay from discrete choice models," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 57-61.
    6. Marcucci, Edoardo & Gatta, Valerio & Scaccia, Luisa, 2015. "Urban freight, parking and pricing policies: An evaluation from a transport providers’ perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 74(C), pages 239-249.
    7. Shams, Kollol & Asgari, Hamidreza & Jin, Xia, 2017. "Valuation of travel time reliability in freight transportation: A review and meta-analysis of stated preference studies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 228-243.
    8. Isler, Cassiano Augusto & Blumenfeld, Marcelo & Caldeira, Gabriel Pereira & Roberts, Clive, 2024. "Long-Distance railway mode choice in Brazil: Evidence from a discrete choice experiment," Research in Transportation Economics, Elsevier, vol. 104(C).
    9. Marcucci, Edoardo & Gatta, Valerio & Le Pira, Michela, 2018. "Gamification design to foster stakeholder engagement and behavior change: An application to urban freight transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 119-132.
    10. Rodrigo J. Tapia & Gerard Jong & Ana M. Larranaga & Helena B. Bettella Cybis, 2021. "Exploring Multiple‐discreteness in Freight Transport. A Multiple Discrete Extreme Value Model Application for Grain Consolidators in Argentina," Networks and Spatial Economics, Springer, vol. 21(3), pages 581-608, September.
    11. Lukas Leitner, 2024. "Imprecision in the Estimation of Willingness to Pay Using Subjective Well-Being Data," Journal of Happiness Studies, Springer, vol. 25(7), pages 1-40, October.
    12. Adriano Alessandrini & Paolo Delle Site & Valerio Gatta & Edoardo Marcucci & Qing Zhang, 2015. "Stated Preference Logit Analysis Of Users’Attitudes Towards Conventional And Automated Buses," Working Papers 0215, CREI Università degli Studi Roma Tre, revised 2015.
    13. Juan Gabriel Brida & Juan Carlos Martín & Concepción Román & Raffaele Scuderi, 2017. "Air and HST Multimodal Products. A Segmentation Analysis for Policy Makers," Networks and Spatial Economics, Springer, vol. 17(3), pages 911-934, September.
    14. Le Pira, Michela & Marcucci, Edoardo & Gatta, Valerio, 2021. "Roman holiday: Tourist heterogeneous preferences for walking path elements," Research in Transportation Economics, Elsevier, vol. 90(C).
    15. Román, Concepción & Arencibia, Ana Isabel & Feo-Valero, María, 2017. "A latent class model with attribute cut-offs to analyze modal choice for freight transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 212-227.
    16. Lagorio, Alexandra & Pinto, Roberto, 2021. "Food and grocery retail logistics issues: A systematic literature review," Research in Transportation Economics, Elsevier, vol. 87(C).
    17. dell’Olio, Luigi & Moura, Jose Luis & Ibeas, Angel & Cordera, Ruben & Holguin-Veras, Jose, 2017. "Receivers’ willingness-to-adopt novel urban goods distribution practices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 102(C), pages 130-141.
    18. Evangelinos, Christos & Tscharaktschiew, Stefan & Marcucci, Edoardo & Gatta, Valerio, 2018. "Pricing workplace parking via cash-out: Effects on modal choice and implications for transport policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 369-380.
    19. Celine Michaud & Daniel Llerena & Iragael Joly, 2013. "Willingness to pay for environmental attributes of non-food agricultural products: a real choice experiment," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(2), pages 313-329, March.
    20. Jaung, Wanggi & Putzel, Louis & Bull, Gary Q. & Guariguata, Manuel R. & Sumaila, Ussif Rashid, 2016. "Estimating demand for certification of forest ecosystem services: A choice experiment with Forest Stewardship Council certificate holders," Ecosystem Services, Elsevier, vol. 22(PA), pages 193-201.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:82:y:2015:i:c:p:169-192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.