Relating environmental attitudes and contingent values: how robust are methods for identifying preference heterogeneity?

Gwendolyn Aldrich, Kristine Grimsrud, Jennifer Thacher and Matthew Kotchen

Environmental & Resource Economics, 2007, vol. 37, issue 4, 757-775

Abstract: We assess the importance and robustness of cluster analysis and latent class analysis as methods to account for unobserved heterogeneity. We provide a critique and comparison of both methods in the context of measuring environmental attitudes and a contingent valuation study involving endangered species. We find strong evidence of robustness for these methods: group characterization and assignment of individuals to groups are similar between methods, and willingness-to-pay estimates are consistent. In addition, there are significant differences in willingness-to-pay across environmental attitudinal groups, and we find that accounting for unobservable heterogeneity provides a significantly better fitting model. Copyright Springer Science+Business Media, Inc. 2007

Keywords: Cluster analysis; Contingent valuation; Latent class analysis; New Ecological Paradigm; Unobservable heterogeneity; Willingness-to-pay (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (44)

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DOI: 10.1007/s10640-006-9054-7

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