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An Improved Method for Calibrating Purchase Intentions in Stated Preference Demand Models

Stephen P. Davies and John Loomis

Journal of Agricultural and Applied Economics, 2010, vol. 42, issue 4, 15

Abstract: The Orbit demand model allows the magnitude of the calibration to stated purchase intentions to vary based on the magnitude of the stated quantities. Using an empirical example of stated trips, we find that the extent of calibration varies substantially with less correction needed at small stated trips (–25%) but larger corrections at higher quantities of stated visits (–48%). We extend the Orbit model to calculate consumer surplus per stated trip of $26. Combining the calibrations in stated trips and value per trip, the Orbit model provides estimates of annual benefits from 60% to 111% less than the count data model.

Keywords: Agribusiness; Agricultural Finance; Consumer/Household Economics; Demand and Price Analysis; Financial Economics; Food Consumption/Nutrition/Food Safety; Institutional and Behavioral Economics; Marketing; Production Economics; Productivity Analysis; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Date: 2010
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DOI: 10.22004/ag.econ.100521

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