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Accounting for Spatial Heterogeneity and Autocorrelation in Spatial Discrete Choice Models: Implications for Behavioral Predictions

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  • Kurt E. Schnier
  • Ronald G. Felthoven

Abstract

The random utility model (RUM) is commonly used in the land-use and fishery economics literature. This research investigates the affect that spatial heterogeneity and spatial autocorrelation have within the RUM framework using alternative specifications of the multinomial logit, multinomial probit, and spatial multinomial probit models. Using data on the spatial decisions of fishermen, the results illustrate that ignoring spatial heterogeneity in the unobservable portion of the RUM dramatically affects model performance and welfare estimates. Furthermore, accounting for spatial autocorrelation in addition to spatial heterogeneity increases the performance of the RUM.

Suggested Citation

  • Kurt E. Schnier & Ronald G. Felthoven, 2011. "Accounting for Spatial Heterogeneity and Autocorrelation in Spatial Discrete Choice Models: Implications for Behavioral Predictions," Land Economics, University of Wisconsin Press, vol. 87(3), pages 382-402.
    • Handle: RePEc:uwp:landec:v:87:y:2011:iii:1:p:382-402
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    Cited by:

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    3. Hutniczak, Barbara & Münch, Angela, 2018. "Fishermen's location choice under spatio-temporal update of expectations," Journal of choice modelling, Elsevier, vol. 28(C), pages 124-136.

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    More about this item

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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