Relating environmental attitudes and contingent values: how robust are methods for identifying preference heterogeneity?
We assess the importance and robustness of cluster analysis and latent class analysis as methods to account for unobserved heterogeneity. We provide a critique and comparison of both methods in the context of measuring environmental attitudes and a contingent valuation study involving endangered species. We find strong evidence of robustness for these methods: group characterization and assignment of individuals to groups are similar between methods, and willingness-to-pay estimates are consistent. In addition, there are significant differences in willingness-to-pay across environmental attitudinal groups, and we find that accounting for unobservable heterogeneity provides a significantly better fitting model. Copyright Springer Science+Business Media, Inc. 2007
Volume (Year): 37 (2007)
Issue (Month): 4 (August)
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