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

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

doi:10.1111/1467-8489.12246

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

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

Department of Food and Resource Economics

Research output: Contribution to journal › Article › peer-review

16 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 language	English
Pages (from-to)	185-198
Number of pages	14
Journal	Australian Journal of Agricultural and Resource Economics
Volume	62
Issue number	2
DOIs	https://doi.org/10.1111/1467-8489.12246
Publication status	Published - 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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10.1111/1467-8489.12246

Cite this

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

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.",

keywords = "WTP space, flexible mixing distribution, induced value choice experiment, normal distribution",

author = "Claudia Bazzani and Palma, {Marco A.} and Nayga, {Rodolfo M.}",

note = "Funding Information: *This work was partly supported by the Tyson Chair Endowment at the University of Arkansas and by the National Research Foundation of Korea (NRF-2014S1A3A2044459) and Research Council of Norway (Grant #233800). The authors want to thank Professor Christian A. Vossler, Professor Nicolas Jacquemet, Dr. Stephane Luchini and Dr. Verity Watson for their help suggestions in the design of the Induced Value Choice Experiment. Finally, the authors thank Professor Vincenzina Caputo, Diana Danforth and Professor Maurizio Canavari for their support in the experimental design. Publisher Copyright: {\textcopyright} 2018 Australasian Agricultural and Resource Economics Society Inc.",

year = "2018",

month = apr,

doi = "10.1111/1467-8489.12246",

language = "English",

volume = "62",

pages = "185--198",

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T2 - an induced value choice experiment

AU - Bazzani, Claudia

AU - Palma, Marco A.

AU - Nayga, Rodolfo M.

N1 - Funding Information: *This work was partly supported by the Tyson Chair Endowment at the University of Arkansas and by the National Research Foundation of Korea (NRF-2014S1A3A2044459) and Research Council of Norway (Grant #233800). The authors want to thank Professor Christian A. Vossler, Professor Nicolas Jacquemet, Dr. Stephane Luchini and Dr. Verity Watson for their help suggestions in the design of the Induced Value Choice Experiment. Finally, the authors thank Professor Vincenzina Caputo, Diana Danforth and Professor Maurizio Canavari for their support in the experimental design. Publisher Copyright: © 2018 Australasian Agricultural and Resource Economics Society Inc.

PY - 2018/4

Y1 - 2018/4

N2 - 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.

AB - 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.

KW - WTP space

KW - flexible mixing distribution

KW - induced value choice experiment

KW - normal distribution

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DO - 10.1111/1467-8489.12246

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JF - Australian Journal of Agricultural and Resource Economics

IS - 2

ER -

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

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Keywords

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