Improving Solid Waste Management in the Island of Beauty (Corsica): a Latent-Class Rank-Ordered Logit Approach with Observed Heterogenous Ranking Capabilities

Olivier Beaumais, Dominique Prunetti, Anne Casabianca and Xavier Pieri

Revue d'économie politique, 2015, vol. 125, issue 2, 209-231

Abstract: In the Mediterranean so-called ?Island of Beauty? (Corsica), solid waste is mainly disposed in landfills. Most of these landfills do not comply with European Union Directives. Recently, an incinerator project was abandoned due to strong opposition from various associations and civil society representatives. Opponents to the project put forward potential threats in terms of pollution. Our study applied a latent-class rank-ordered logit model to estimate marginal willingness-to-pay to decrease pollution associated with solid waste management, using data from a ranking choice experiment. It has long been recognized that the rank-ordered logit model provides efficiency gains, when compared to the basic multinomial logit model. However, respondents may not all be able to give a reliable complete ranking of the alternatives they face. In order to deal with the ranking capability issue and avoid ?noisy? rankings which may result in biased estimates, we designed the survey that we conducted in Corsica in a way that allows the respondents to state their actual ranking capability. We suggest that this appropriate survey design may provide the information necessary to assess further the ranking capability issue within the framework of a latent-class rank-ordered logit model. Using rankings given by a representative sample of the Corsican population (530 respondents), we compare estimates obtained using a simple benchmark rank-ordered logit model and 2-class rank-ordered logit model chosen according to the BIC and the CAIC information criteria. We find strong differences in the willingness-to-pay to reduce the environmental impacts of waste management in Corsica for the two classes of respondents, which can be related to the stated ranking capability.

Keywords: Choice experiment; Ranking capabilities; Latent-class rank-ordered logit model; Monetary valuation; Corsica; Solid waste management (search for similar items in EconPapers)
Date: 2015
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Working Paper: Improving Solid Waste Management in the Island of Beauty (Corsica): a Latent-Class Rank-Ordered Logit Approach with Observed Heterogenous Ranking Capabilities (2015)
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