Interpretation issues in heteroscedastic conditional logit models
Katrina Davis () and
No 235296, Working Papers from University of Western Australia, School of Agricultural and Resource Economics
This paper identifies an issue with interpretation of significance within heteroscedastic conditional logit models, due to sensitivity of reported results to arbitrary variable-normalization decisions. We advocate the use of willingness-to-pay (WTP) space models to avoid this, as estimates of WTP do not exhibit this effect. However, in cases where error variance may be high, we question whether it is correct to infer that all respondents should be considered to hold a common WTP.
Keywords: Environmental Economics and Policy; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy (search for similar items in EconPapers)
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