Analysing Preference Heterogeneith using Random Parameter Logit and Latent Class Modelling Techniques

Stephen Hynes and Nick Hanley

No 91, Working Papers from National University of Ireland Galway, Department of Economics

Abstract: Multi-attribute revealed preference data is used to investigate the heterogeneity of tastes in a sample of kayakers, in relation to eleven whitewater sites in Ireland. The paper focuses on a comparison of the analysis of preference heterogeneity using a random parameter logit model and a latent class model. We assess and contrast the evidence for the presence of a finite number of 2, 3, 4 and 5 latent preference groups (classes), and contrast these with the presence of a continuous distribution of parameter estimates using the random parameter logit model. Welfare estimates associated with changes in the attributes of particular whitewater sites are also presented, and are found to vary considerably depending on the approach taken..

Keywords: Whitewater kayaking; random parameter logit; latent class models; preference heterogeneity. (search for similar items in EconPapers)
JEL-codes: Q51 Q56 (search for similar items in EconPapers)
Date: 2005, Revised 2005
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