IDEAS home Printed from
   My bibliography  Save this article

Estimating Distributions of Willingness to Pay for Heterogeneous Populations


  • Chhandita Das

    () (Compete, Inc., Four Copley Place, Suite 700, Boston, MA 02116, USA)

  • Christopher M. Anderson

    () (Department of Environmental & Natural Resource Economics, University of Rhode Island, 205 Kingston Coastal Institute, One Greenhouse Road, Kingston, RI 02881, USA)

  • Stephen K. Swallow

    () (Department of Environmental & Natural Resource Economics, University of Rhode Island, 205 Kingston Coastal Institute, One Greenhouse Road, Kingston, RI 02881, USA)


Random parameters logit models have emerged as a standard approach in estimating public preferences for a range of goods and services. However, to simplify calculation of welfare measures, the marginal utility of income is often assumed to be constant across the population. We show that by shifting distributional assumptions from marginal utilities to the welfare measures themselves, a random parameters version of a censored logistic regression model (Cameron 1988) yields distributions of welfare measures more directly and without imposing any unnecessary assumption on the marginal utility of income. We develop the theoretical framework for the model and apply it to contingent choice survey data for siting a noxious facility in Rhode Island. In this application, our proposed model and random parameters logit yield similar mean willingness to pay, but welfare measures are more readily interpretable in the proposed model.

Suggested Citation

  • Chhandita Das & Christopher M. Anderson & Stephen K. Swallow, 2009. "Estimating Distributions of Willingness to Pay for Heterogeneous Populations," Southern Economic Journal, Southern Economic Association, vol. 75(3), pages 593-610, January.
  • Handle: RePEc:sej:ancoec:v:75:3:y:2009:p:593-610

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    2. Örn B. Bodvarsson & Raymond T. Brastow, 1999. "A Test Of Employer Discrimination In The Nba," Contemporary Economic Policy, Western Economic Association International, vol. 17(2), pages 243-255, April.
    3. Kahn, Lawrence M & Sherer, Peter D, 1988. "Racial Differences in Professional Basketball Players' Compensation," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 40-61, January.
    4. Mark C. Berger & Dan A. Black, 1998. "The Duration Of Medicaid Spells: An Analysis Using Flow And Stock Samples," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 667-675, November.
    5. Hoang, Ha & Rascher, Dan, 1999. "The NBA, Exit Discrimination, and Career Earnings," MPRA Paper 3542, University Library of Munich, Germany.
    6. Bernt Bratsberg & Dek Terrell, 1998. "Experience, Tenure, and Wage Growth of Young Black and White Men," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 658-682.
    7. Peter A. Groothuis & J. Richard Hill, 2002. "Exit Discrimination in the NBA: A Duration Analysis of Career Length Using Flow and Stock Samples," Working Papers 02-11, Department of Economics, Appalachian State University.
    8. Kanazawa, Mark T & Funk, Jonas P, 2001. "Racial Discrimination in Professional Basketball: Evidence from Nielsen Ratings," Economic Inquiry, Western Economic Association International, vol. 39(4), pages 599-608, October.
    9. Donald J. Cymrot, 1985. "Does Competition Lessen Discrimination? Some Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 605-612.
    10. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
    11. Lawrence M. Kahn, 1991. "Discrimination in Professional Sports: A Survey of the Literature," ILR Review, Cornell University, ILR School, vol. 44(3), pages 395-418, April.
    12. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-564, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects


    Access and download statistics


    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:sej:ancoec:v:75:3:y:2009:p:593-610. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.