On the use of flexible mixing distributions in WTP space: an induced value choice experiment

Claudia Bazzani, Marco A. Palma, Rodolfo M. Nayga

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)

Abstract

In this study, we use data from an induced value choice experiment to compare estimates from mixed logit models in willingness to pay (WTP) space using different parameter distributional assumptions. Specifically, we test differences in WTP estimates when using flexible parameter mixing distributions (i.e. Legendre polynomials, step functions and splines) and conventional parameter distributions (normal and lognormal). Similar WTP estimates are obtained. However, we observe that WTP estimates are statistically different from the induced value when conventional distributions are assumed, but they are not when more flexible distributions are assumed. This suggests that flexible distributions can provide more reliable WTP estimates.

Original languageEnglish
Pages (from-to)185-198
Number of pages14
JournalAustralian Journal of Agricultural and Resource Economics
Volume62
Issue number2
DOIs
Publication statusPublished - 2018 Apr

Keywords

  • WTP space
  • flexible mixing distribution
  • induced value choice experiment
  • normal distribution

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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