Investigating Scale Heterogeneity in Latent Class Models

Marco Boeri, Edel Doherty, Danny Campbell () and Alberto Longo

No 148833, Working Papers from National University of Ireland, Galway, Socio-Economic Marine Research Unit

Abstract: This paper develops and compares two alternative approaches to accommodate scale heterogeneity (also referred to as heteroskedasticity) in latent class models. Our modelling approach compares two different representations of heteroskedasticity, respectively associating the heterogeneity in scale factor with respondent's characteristics (i.e. observed scale heterogeneity) or deriving it probabilistically (i.e. unobserved scale heterogeneity). The results reveal a number of benefits associated with this type of approach, particularly when heterosckedasticity can be linked to observed characteristics of the respondent. Our data comes from a discrete choice experiment eliciting recreational users preferences for farmland walking trails in Ireland

Keywords: Environmental Economics and Policy; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 35
Date: 2012
New Economics Papers: this item is included in nep-dcm and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:semrui:148833

DOI: 10.22004/ag.econ.148833

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