EconPapers    
Economics at your fingertips  
 

Selecting random parameters in discrete choice experiment for environmental valuation: A simulation experiment

Petr Mariel, Amaya de Ayala, David Hoyos () and Sabah Abdullah ()

Journal of choice modelling, 2013, vol. 7, issue C, 44-57

Abstract: This paper examines two tests commonly used to select random parameters in choice modelling: the Lagrange Multiplier (LM) test as proposed by McFadden and Train (2000) and the t-statistic of the deviation of the random parameter. A simulation exercise based on a real case study is carried out assuming cross-sectional data and two panel data settings. These data structures together with different distributional assumptions allow an examination of the empirical size and power of the two analysed tests. The key results indicate that the power of these tests depends on the data structure as well as on the spread and type of the parameter distribution. Furthermore, the LM test is the only one with empirical size not significantly different from the theoretical value.

Keywords: Choice experiment; Preference heterogeneity; Random parameter logit; Simulation (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1755534513000146
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Selecting random parameters in discrete choice experiment for environmental valuation: A simulation experiment (2010) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eejocm:v:7:y:2013:i:c:p:44-57

Access Statistics for this article

Journal of choice modelling is currently edited by S. Hess and J.M. Rose

More articles in Journal of choice modelling from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-07-20
Handle: RePEc:eee:eejocm:v:7:y:2013:i:c:p:44-57