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Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments

  • Danny Campbell

    ()

  • W. Hutchinson

    ()

  • Riccardo Scarpa

    ()

: Data from a discrete choice experiment on improvements of rural landscape attributes are used to investigate the implications of discontinuous preferences on willingness to pay estimates. Using a multinomial error component logit model, we explore differences in scale and unexplained variance between respondents with discontinuous and continuous preferences and condition taste intensities on whether or not each attribute was considered by the respondent during the evaluation of alternatives. Results suggest that significant improvements in model performance can be achieved when discontinuous preferences are accommodated in the econometric specification, and that the magnitude and robustness of the willingness to pay estimates are sensitive to discontinuous preferences.

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File URL: http://hdl.handle.net/10.1007/s10640-008-9198-8
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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 41 (2008)
Issue (Month): 3 (November)
Pages: 401-417

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Handle: RePEc:kap:enreec:v:41:y:2008:i:3:p:401-417
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100263

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  18. Danny Campbell & W. George Hutchinson & Riccardo Scarpa, 2006. "Using Discrete Choice Experiments to Derive Individual-Specific WTP Estimates for Landscape Improvements under Agri-Environmental Schemes: Evidence from the Rural Environment Protection Scheme in Irel," Working Papers 2006.26, Fondazione Eni Enrico Mattei.
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