Comparing models of unobserved heterogeneity in environmental choice experiments

Marit Kragt

No 152198, 2013 Conference (57th), February 5-8, 2013, Sydney, Australia from Australian Agricultural and Resource Economics Society

Abstract: Choice experiments have become a widespread approach to non-market environmental valuation. Given the vast range of public opinions towards environmental management changes, it is desirable that analysis of discrete choice data accounts for the possibility of unobserved heterogeneity amongst the population. There is, however, no consensus about the best way to model individual heterogeneity. This paper presents four approaches to modelling heterogeneity that are increasingly used in the literature. Latent class, mixed logit, scaled multinational logit and generalised mixed logit (GMXL) models are estimated using case study data for catchment environmental management in Australia. A GMXL model that accounts for preference and scale heterogeneity performs best. I evaluate the impacts of models on welfare estimates and discuss the merits of each modelling approach.

Keywords: Environmental Economics and Policy; Research and Development/Tech Change/Emerging Technologies; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 24
Date: 2013-02
New Economics Papers: this item is included in nep-dcm and nep-env
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Citations: View citations in EconPapers (1)

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Working Paper: Comparing models of unobserved heterogeneity in environmental choice experiments (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare13:152198

DOI: 10.22004/ag.econ.152198

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