Combining mixed logit models and random effects models to identify the determinants of willingness to pay for rural landscape improvements
This paper reports the findings from a discrete choice experiment study designed to estimate the economic benefits associated with rural landscape improvements in Ireland. Using a mixed logit model, the panel nature of the dataset is exploited to retrieve willingness to pay values for every individual in the sample. This departs from customary approaches in which the willingness to pay estimates are normally expressed as measures of central tendency of an a priori distribution. In a different vein from analysis conducted in previous discrete choice experiment studies, this paper uses random effects models for panel data to identify the determinants of the individual-specific willingness to pay estimates. In comparison with the standard methods used to incorporate individual-specific variables into the analysis of discrete choice experiments, the analytical approach outlined in this paper is shown to add considerably more validity and explanatory power to welfare estimates
|Date of creation:||2007|
|Contact details of provider:|| Web page: http://www.aes.ac.uk/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jayson L. Lusk & F. Bailey Norwood, 2005. "Effect of Experimental Design on Choice-Based Conjoint Valuation Estimates," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 771-785.
- Foster, Vivien & Mourato, Susana, 2002. "Testing for Consistency in Contingent Ranking Experiments," Journal of Environmental Economics and Management, Elsevier, vol. 44(2), pages 309-328, September.
- Kenneth E. Train, 1998. "Recreation Demand Models with Taste Differences over People," Land Economics, University of Wisconsin Press, vol. 74(2), pages 230-239.
- Bhat, Chandra R., 2003. "Simulation estimation of mixed discrete choice models using randomized and scrambled Halton sequences," Transportation Research Part B: Methodological, Elsevier, vol. 37(9), pages 837-855, November.
- Brownstone, David & Train, Kenneth, 1999.
"Forecasting new product penetration with flexible substitution patterns,"
University of California Transportation Center, Working Papers
qt3tb6j874, University of California Transportation Center.
- Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
- Brownstone, David & Train, Kenneth, 1999. "Forecasting new product penetration with flexible substitution patterns," University of California Transportation Center, Working Papers qt1j6814b3, University of California Transportation Center.
- Ferrini, Silvia & Scarpa, Riccardo, 2007. "Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 342-363, May.
- Hanley, Nick & Mourato, Susana & Wright, Robert E, 2001. " Choice Modelling Approaches: A Superior Alternative for Environmental Valuation?," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 435-462, July.
- Train, K. & Weeks, M., 2004. "Discrete Choice Models in Preference Space and Willingness-to Pay Space," Cambridge Working Papers in Economics 0443, Faculty of Economics, University of Cambridge.
- Greene, William H. & Hensher, David A. & Rose, John, 2006. "Accounting for heterogeneity in the variance of unobserved effects in mixed logit models," Transportation Research Part B: Methodological, Elsevier, vol. 40(1), pages 75-92, January.
- Riccardo Scarpa & Danny Campbell & W. George Hutchinson, 2007. "Benefit Estimates for Landscape Improvements: Sequential Bayesian Design and Respondents’ Rationality in a Choice Experiment," Land Economics, University of Wisconsin Press, vol. 83(4), pages 617-634.
- Zsolt Sándor & Michel Wedel, 2002. "Profile Construction in Experimental Choice Designs for Mixed Logit Models," Marketing Science, INFORMS, vol. 21(4), pages 455-475, February.
- Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
- Thomas P. Holmes & Kevin J. Boyle, 2005. "Dynamic Learning and Context-Dependence in Sequential, Attribute-Based, Stated-Preference Valuation Questions," Land Economics, University of Wisconsin Press, vol. 81(1), pages -.
- Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
- Felix Schläpfer & Nick Hanley, 2003. "Do Local Landscape Patterns Affect the Demand for Landscape Amenities Protection?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 21-34.
- Breusch, T.S. & Pagan, A.R., "undated".
"The Lagrange multiplier test and its applications to model specification in econometrics,"
CORE Discussion Papers RP
412, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 239-253.
- David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
- Fernando San Miguel & Mandy Ryan & Mabelle Amaya-Amaya, 2005. "'Irrational' stated preferences: a quantitative and qualitative investigation," Health Economics, John Wiley & Sons, Ltd., vol. 14(3), pages 307-322.
- Mauricio Sillano & Juan de Dios Ortúzar, 2005. "Willingness-to-pay estimation with mixed logit models: some new evidence," Environment and Planning A, Pion Ltd, London, vol. 37(3), pages 525-550, March.
- F. Reed Johnson & Kristy E. Mathews, 2001. "Sources and Effects of Utility-Theoretic Inconsistency in Stated-Preference Surveys," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1328-1333.
- Caussade, Sebastián & Ortúzar, Juan de Dios & Rizzi, Luis I. & Hensher, David A., 2005. "Assessing the influence of design dimensions on stated choice experiment estimates," Transportation Research Part B: Methodological, Elsevier, vol. 39(7), pages 621-640, August.
When requesting a correction, please mention this item's handle: RePEc:ags:aes007:7975. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.