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Dealing with Heterogeneous Preferences Using Multilevel Mixed Models

Author

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  • Begoña A. Farizo
  • John Joyce
  • Mario Soliño

Abstract

One of the main issues on the research agenda regarding stated preference methods concerns the heterogeneity of preferences either within or between individuals. We present a multilevel mixed model (MMM) to capture heterogeneity in deterministic utility components, instead of simply leaving them to random components. MMM captures heterogeneity at different levels: individuals, locations, and groups of individuals sharing other characteristics. The results show that individuals’ surroundings help to capture heterogeneity, and that can be controlled by specifying these aspects as predictors for this behavioral model. Therefore, MMM may contribute to the identification of the underlying structure affecting environmental decisions.

Suggested Citation

  • Begoña A. Farizo & John Joyce & Mario Soliño, 2014. "Dealing with Heterogeneous Preferences Using Multilevel Mixed Models," Land Economics, University of Wisconsin Press, vol. 90(1), pages 181-198.
    • Handle: RePEc:uwp:landec:v:90:y:2014:i:1:p:181-198
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    References listed on IDEAS

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    Cited by:

    1. Rommel, Jens & Sagebiel, Julian & Müller, Jakob R., 2016. "Quality uncertainty and the market for renewable energy: Evidence from German consumers," Renewable Energy, Elsevier, vol. 94(C), pages 106-113.
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    5. Soliño, M. & Alía, R. & Agúndez, D., 2020. "Citizens' preferences for research programs on forest genetic resources: A case applied to Pinus pinaster Ait. in Spain," Forest Policy and Economics, Elsevier, vol. 118(C).
    6. Mario Soliño & Begoña A Farizo, 2014. "Personal Traits Underlying Environmental Preferences: A Discrete Choice Experiment," PLOS ONE, Public Library of Science, vol. 9(2), pages 1-7, February.

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    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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