Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments

Danny Campbell (), W. George Hutchinson () and Riccardo Scarpa ()
Additional contact information
W. George Hutchinson: Queen’s University Belfast

Working Papers in Economics from University of Waikato, Department of Economics

Abstract: : Data from a discrete choice experiment on improvements of rural landscape attributes are used to investigate the implications of discontinuous preferences on willingness to pay estimates. Using a multinomial error component logit model, we explore differences in scale and unexplained variance between respondents with discontinuous and continuous preferences and condition taste intensities on whether or not each attribute was considered by the respondent during the evaluation of alternatives. Results suggest that significant improvements in model performance can be achieved when discontinuous preferences are accommodated in the econometric specification, and that the magnitude and robustness of the willingness to pay estimates are sensitive to discontinuous preferences.

Keywords: discontinuous preferences; heteroskedastic mixed logit; discrete choice experiments; multinomial error component logit model; rural landscape; willingness to pay (search for similar items in EconPapers)
JEL-codes: C13 C15 C25 C99 Q26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-dcm
Date: 2007-09-20

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ftp://mngt.waikato.ac.nz/RePEc/wai/econwp/0718.pdf (application/pdf)

Related works:
Journal Article: Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:wai:econwp:07/18

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