Estimation of the preference heterogeneity within stated choice data using semiparametric varying-coefficient methods

Tadao Hoshino ()

Empirical Economics, 2013, vol. 45, issue 3, 1129-1148

Abstract: This study proposes the use of semiparametric varying-coefficient methods to estimate the preference heterogeneity within stated choice data. Semiparametric varying-coefficient methods have the potential to overcome the disadvantages of conventional random parameter models and latent class models. For binary probit models with varying coefficients, in particular, this study proposes an easy-to-compute local iterative least squares (LILS) approach, based on the expectation–maximization algorithm. The finite sample properties of the LILS estimator are assessed using Monte Carlo experiments. In order to demonstrate the practical usefulness of semiparametric varying-coefficient methods, we present an empirical study, conducting an economic valuation of a landscape with dichotomous choice contingent valuations. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Preference heterogeneity; Discrete choice models; Stated choice data; Varying-coefficient models; EM algorithm; Dichotomous-choice contingent valuation; C14; C25; Q51 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00181-012-0646-5

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