Combining mixed logit models and random effects models to identify the determinants of willingness to pay for rural landscape improvements

Danny Campbell ()

No 7975, 81st Annual Conference, April 2-4, 2007, Reading University from Agricultural Economics Society

Abstract: 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

Keywords: Agri-environment; discrete choice experiments; mixed logit; panel data; random effects; willingness to pay; Demand and Price Analysis; Environmental Economics and Policy; C33; C35; Q24; Q51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-ecm and nep-env
Date: 2007
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