Utility in Willingness to Pay Space: A Tool to Address Confounding Random Scale Effects in Destination Choice to the Alps

Riccardo Scarpa, Mara Thiene () and Kenneth Train ()

American Journal of Agricultural Economics, 2008, vol. 90, issue 4, 994-1010

Abstract: We compare two approaches for estimating the distribution of consumers' willingness to pay (WTP) in discrete choice models. The usual procedure is to estimate the distribution of the utility coefficients and then derive the distribution of WTP, which is the ratio of coefficients. The alternative is to estimate the distribution of WTP directly. We apply both approaches to data on site choice in the Alps. We find that the alternative approach fits the data better, reduces the incidence of exceedingly large estimated WTP values, and provides the analyst with greater control in specifying and testing the distribution of WTP. Copyright 2008, Oxford University Press.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (291)

Downloads: (external link)
http://hdl.handle.net/10.1111/j.1467-8276.2008.01155.x (application/pdf)
Access to full text is restricted to subscribers.

Related works:
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:oup:ajagec:v:90:y:2008:i:4:p:994-1010

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().