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Addressing Preference Heterogeneity, Multiple Scales and Attribute Attendance with a Correlated Finite Mixing Model of Tap Water Choice

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  • Mara Thiene
  • Riccardo Scarpa
  • Jordan Louviere

Abstract

Unobserved heterogeneity of error scale in choice models is a recent extension of the better investigated issue of heterogeneity of taste intensity. It is achieved by fitting choice panel data with specifications that simultaneously handle inter-personal variation in scale and taste. The aim is to separate differences in preference intensities across respondents from differences in the degree of consistency in choice behaviour, or ‘preference discrimination’, while accounting for correlation between the two. Another recent substantive issue in choice data analysis is attribute non-attendance. We develop a finite mixing model to address simultaneously the three issues above. We empirically prove the concept on stated preference data related to tap water attributes in a study for industry regulation. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Mara Thiene & Riccardo Scarpa & Jordan Louviere, 2015. "Addressing Preference Heterogeneity, Multiple Scales and Attribute Attendance with a Correlated Finite Mixing Model of Tap Water Choice," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(3), pages 637-656, November.
  • Handle: RePEc:kap:enreec:v:62:y:2015:i:3:p:637-656
    DOI: 10.1007/s10640-014-9838-0
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    2. Masiero, Mauro & Franceschinis, Cristiano & Mattea, Stefania & Thiene, Mara & Pettenella, Davide & Scarpa, Riccardo, 2018. "Ecosystem services’ values and improved revenue collection for regional protected areas," Ecosystem Services, Elsevier, vol. 34(PA), pages 136-153.
    3. Riccardo Scarpa & Cristiano Franceschinis & Mara Thiene, 2021. "Logit Mixed Logit Under Asymmetry and Multimodality of WTP: A Monte Carlo Evaluation," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 643-662, March.
    4. Dalemans, Floris & Muys, Bart & Verwimp, Anne & Van den Broeck, Goedele & Bohra, Babita & Sharma, Navin & Gowda, Balakrishna & Tollens, Eric & Maertens, Miet, 2018. "Redesigning oilseed tree biofuel systems in India," Energy Policy, Elsevier, vol. 115(C), pages 631-643.
    5. Gonçalves, Tânia & Pinto, Lígia M. Costa & Lourenço-Gomes, Lina, 2019. "Exploring distinct sources of heterogeneity in discrete choice experiment: An application to wine choice across European consumers," Economics Letters, Elsevier, vol. 178(C), pages 28-32.
    6. Mokas, Ilias & Lizin, Sebastien & Brijs, Tom & Witters, Nele & Malina, Robert, 2021. "Can immersive virtual reality increase respondents’ certainty in discrete choice experiments? A comparison with traditional presentation formats," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    7. Riccardo Scarpa & Cristiano Franceschinis & Mara Thiene, 2017. "A Monte Carlo Evaluation of the Logit-Mixed Logit under Asymmetry and Multimodality," Working Papers in Economics 17/23, University of Waikato.
    8. Rogers, Abbie A. & Burton, Michael P. & Cleland, Jonelle A. & Rolfe, John & Meeuwig, Jessica J. & Pannell, David J., 2017. "Expert judgements and public values: preference heterogeneity for protecting ecology in the Swan River, Western Australia," Working Papers 254025, University of Western Australia, School of Agricultural and Resource Economics.
    9. Macario Rodríguez‐Entrena & Anastasio J. Villanueva & José A. Gómez‐Limón, 2019. "Unraveling determinants of inferred and stated attribute nonattendance: Effects on farmers’ willingness to accept to join agri‐environmental schemes," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 67(1), pages 31-52, March.
    10. Thiene, Mara & Scarpa, Riccardo & Longo, Alberto & Hutchinson, William George, 2018. "Types of front of pack food labels: Do obese consumers care? Evidence from Northern Ireland," Food Policy, Elsevier, vol. 80(C), pages 84-102.
    11. Lutzeyer, Sanja & Phaneuf, Daniel J. & Taylor, Laura O., 2018. "The amenity costs of offshore wind farms: Evidence from a choice experiment," Energy Economics, Elsevier, vol. 72(C), pages 621-639.
    12. Logar, Ivana & Brouwer, Roy & Campbell, Danny, 2020. "Does attribute order influence attribute-information processing in discrete choice experiments?," Resource and Energy Economics, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    Water quality attributes; Choice experiments; Latent class; Preference heterogeneity; Scale parameter; Attribute processing rules; H41; Q25; Q51;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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