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Valuing Bundled Attributes: A Latent Characteristics Approach

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  • Linwood H. Pendleton
  • J. Scott Shonkwiler

Abstract

Lancaster wrote that attributes of goods may combine to produce characteristics that are the primary units of consumption (1966). Often, the attributes of goods are bundled and cannot be separated. We show that if attributes are technically bundled then valuation analyses that treat these attributes as independent will be wrong. We show that a latent characteristics approach improves upon other methods by incorporating more information about attributes than standard methods and by directly modeling the linkages among attributes. For the case of wilderness hiking, the latent approach provides a statistically better model of site choice than other standard methods.

Suggested Citation

  • Linwood H. Pendleton & J. Scott Shonkwiler, 2001. "Valuing Bundled Attributes: A Latent Characteristics Approach," Land Economics, University of Wisconsin Press, vol. 77(1), pages 118-129.
    • Handle: RePEc:uwp:landec:v:77:y:2001:i:1:p:118-129
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    1. Adamowicz, Wiktor & Swait, Joffre & Boxall, Peter & Louviere, Jordan & Williams, Michael, 1997. "Perceptions versus Objective Measures of Environmental Quality in Combined Revealed and Stated Preference Models of Environmental Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 65-84, January.
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    Cited by:

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    2. Daams, Michiel N. & Sijtsma, Frans J. & Veneri, Paolo, 2019. "Mixed monetary and non-monetary valuation of attractive urban green space: A case study using Amsterdam house prices," Ecological Economics, Elsevier, vol. 166(C), pages 1-1.
    3. Concu, Giovanni B. & Schilizzi, Steven, 2002. "The Rold of Space in Environmental Valuation," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125074, Australian Agricultural and Resource Economics Society.
    4. Kimitoshi Sato, 2015. "Anthropogenic Climate Change in an Integrated Energy Balance Model of Global and Urban Warming," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-21, December.
    5. Michiel N. Daams & Paolo Veneri, 2017. "Living Near to Attractive Nature? A Well-Being Indicator for Ranking Dutch, Danish, and German Functional Urban Areas," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(2), pages 501-526, September.
    6. Rimal, Arbindra & Moon, Wanki & Balasubramanian, Siva K., 2008. "Changes in Soy Based Food Consumption, 2001 and 2007," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6888, Southern Agricultural Economics Association.
    7. Baltas, George & Saridakis, Charalampos, 2013. "An empirical investigation of the impact of behavioural and psychographic consumer characteristics on car preferences: An integrated model of car type choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 92-110.
    8. Di Ciommo, Floridea & Monzón, Andrés & Fernandez-Heredia, Alvaro, 2013. "Improving the analysis of road pricing acceptability surveys by using hybrid models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 302-316.
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    More about this item

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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