IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2004.132.html
   My bibliography  Save this paper

Comparing Individual-Specific Benefit Estimates for Public Goods: Finite Versus Continuous Mixing in Logit Models

Author

Listed:
  • Riccardo Scarpa

    (University of York)

  • Kenneth G. Willis

    (School of Architecture Landscape and Planning, University of Newcastle Upon Tyne)

  • Melinda Acutt

    (Yorkshire Water)

Abstract

Multi-attribute stated preference data, derived through choice experiments, is used to investigate the consequence of a finite number of preference groups in a sample of Yorkshire Water residential customers on the conditional distributions of willingness to pay in the sample. The research focuses on ‘public good’ values, and retrieves the implicit customer specific welfare measures conditional on a sequence of four observed choices. We assess and contrast the sample evidence for the presence of a finite number of 2, 3, 4 and 5 latent preference groups (classes), and contrast these with the presence of a continuous distribution of parameter estimates using mixed logit models. The main focus is the conditional valuations in the form of marginal values for the consequence of waste water handling and treatment, namely: river water quality, area flooding by sewage, presence of odour and flies, and other water related amenities.

Suggested Citation

  • Riccardo Scarpa & Kenneth G. Willis & Melinda Acutt, 2004. "Comparing Individual-Specific Benefit Estimates for Public Goods: Finite Versus Continuous Mixing in Logit Models," Working Papers 2004.132, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2004.132
    as

    Download full text from publisher

    File URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2004-132.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Riccardo Scarpa & Mara Thiene, 2004. "Destination Choice Models for Rock Climbing in the Northeast Alps: A Latent-Class Approach Based on Intensity of Participation," Working Papers 2004.131, Fondazione Eni Enrico Mattei.
    2. Kenneth Train ., 2000. "Halton Sequences for Mixed Logit," Economics Working Papers E00-278, University of California at Berkeley.
    3. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
    4. Scarpa, Riccardo & Ruto, Eric S. K. & Kristjanson, Patti & Radeny, Maren & Drucker, Adam G. & Rege, John E. O., 2003. "Valuing indigenous cattle breeds in Kenya: an empirical comparison of stated and revealed preference value estimates," Ecological Economics, Elsevier, vol. 45(3), pages 409-426, July.
    5. Greene, William H. & Hensher, David A., 2003. "A latent class model for discrete choice analysis: contrasts with mixed logit," Transportation Research Part B: Methodological, Elsevier, vol. 37(8), pages 681-698, September.
    6. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    7. Boxall, Peter C. & Adamowicz, Wiktor L., 1999. "Understanding Heterogeneous Preferences in Random Utility Models: The Use of Latent Class Analysis," Staff Paper Series 24090, University of Alberta, Department of Resource Economics and Environmental Sociology.
    8. DeShazo, J. R. & Fermo, German, 2002. "Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 123-143, July.
    9. Bill Provencher & Kenneth A. Baerenklau & Richard C. Bishop, 2002. "A Finite Mixture Logit Model of Recreational Angling with Serially Correlated Random Utility," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1066-1075.
    10. Peter Boxall & Wiktor Adamowicz, 2002. "Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(4), pages 421-446, December.
    11. Scarpa, Riccardo & Drucker, Adam G. & Anderson, Simon & Ferraes-Ehuan, Nancy & Gomez, Veronica & Risopatron, Carlos R. & Rubio-Leonel, Olga, 2003. "Valuing genetic resources in peasant economies: the case of 'hairless' creole pigs in Yucatan," Ecological Economics, Elsevier, vol. 45(3), pages 427-443, July.
    12. Heckman, James J. & Singer, Burton, 1984. "Econometric duration analysis," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 63-132.
    13. Nick Hanley & W. Douglass Shaw & Robert E. Wright (ed.), 2003. "The New Economics of Outdoor Recreation," Books, Edward Elgar Publishing, number 2712.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hilger, James & Hanemann, Michael, 2006. "Heterogeneous Preferences for Water Quality: A Finite Mixture Model of Beach Recreation in Southern California," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0565c0b2, Department of Agricultural & Resource Economics, UC Berkeley.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Ruto & Guy Garrod & Riccardo Scarpa, 2008. "Valuing animal genetic resources: a choice modeling application to indigenous cattle in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 38(1), pages 89-98, January.
    2. Riccardo Scarpa & Mara Thiene, 2004. "Destination Choice Models for Rock Climbing in the Northeast Alps: A Latent-Class Approach Based on Intensity of Participation," Working Papers 2004.131, Fondazione Eni Enrico Mattei.
    3. Angel Bujosa & Antoni Riera & Robert Hicks, 2010. "Combining Discrete and Continuous Representations of Preference Heterogeneity: A Latent Class Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(4), pages 477-493, December.
    4. Mara Thiene & Riccardo Scarpa & Jordan Louviere, 2015. "Addressing Preference Heterogeneity, Multiple Scales and Attribute Attendance with a Correlated Finite Mixing Model of Tap Water Choice," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(3), pages 637-656, November.
    5. Sergio Colombo & Nick Hanley & Jordan Louviere, 2009. "Modeling preference heterogeneity in stated choice data: an analysis for public goods generated by agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 307-322, May.
    6. Hidrue, Michael K. & Parsons, George R. & Kempton, Willett & Gardner, Meryl P., 2011. "Willingness to pay for electric vehicles and their attributes," Resource and Energy Economics, Elsevier, vol. 33(3), pages 686-705, September.
    7. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    8. Hilger, James & Hanemann, W. Michael, 2008. "The Impact of Water Quality on Southern California Beach Recreation: A Finite Mixture Model Approach," CUDARE Working Papers 47037, University of California, Berkeley, Department of Agricultural and Resource Economics.
    9. Riccardo Scarpa & Mara Thiene, 2005. "Destination Choice Models for Rock Climbing in the Northeastern Alps: A Latent-Class Approach Based on Intensity of Preferences," Land Economics, University of Wisconsin Press, vol. 81(3).
    10. Hilger, James & Hanemann, Michael, 2006. "Heterogeneous Preferences for Water Quality: A Finite Mixture Model of Beach Recreation in Southern California," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0565c0b2, Department of Agricultural & Resource Economics, UC Berkeley.
    11. Kuriyama, Koichi & Michael Hanemann, W. & Hilger, James R., 2010. "A latent segmentation approach to a Kuhn-Tucker model: An application to recreation demand," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 209-220, November.
    12. Satoru Komatsu & Yayu Isyana D. Pongoliu & Masayuki Sakakibara & Taro Ohdoko, 2021. "Examining Preference Heterogeneity in Best-Worst Scaling: Case of Preferences for Job Opportunities in Artisanal Small-Scale Gold Mining (ASGM) Communities in Indonesia," IJERPH, MDPI, vol. 19(1), pages 1-14, December.
    13. Eric Ruto & Riccardo Scarpa, 2010. "Using Choice Experiments to Investigate Preferences for Cattle Traits in Kenya," Chapters, in: Jeff Bennett & Ekin Birol (ed.), Choice Experiments in Developing Countries, chapter 14, Edward Elgar Publishing.
    14. Paleti, Rajesh, 2018. "Generalized multinomial probit Model: Accommodating constrained random parameters," Transportation Research Part B: Methodological, Elsevier, vol. 118(C), pages 248-262.
    15. Kanchanaroek, Yingluk & Termansen, Mette & Quinn, Claire, 2013. "Property rights regimes in complex fishery management systems: A choice experiment application," Ecological Economics, Elsevier, vol. 93(C), pages 363-373.
    16. Kevin W. Maina & Martin C. Parlasca & Elizaphan J. O. Rao & Matin Qaim, 2024. "Farmer‐friendly delivery of veterinary services: Experimental insights from the Kenyan dairy sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(3), pages 829-846, September.
    17. Bujosa Bestard, Angel & Font, Antoni Riera, 2009. "Environmental diversity in recreational choice modelling," Ecological Economics, Elsevier, vol. 68(11), pages 2743-2750, September.
    18. Haile, Kaleab K. & Tirivayi, Nyasha & Tesfaye, Wondimagegn, 2019. "Farmers’ willingness to accept payments for ecosystem services on agricultural land: The case of climate-smart agroforestry in Ethiopia," Ecosystem Services, Elsevier, vol. 39(C).
    19. Houessionon, P. & Fonta, W. M. & Bossa, A. Y. & Sanfo, S. & Thiombiano, N. & Zahonogo, P. & Yameogo, T. B. & Balana, Bedru, "undated". "Economic valuation of ecosystem services from small-scale agricultural management interventions in Burkina Faso: a discrete choice experiment approach," Papers published in Journals (Open Access) H048370, International Water Management Institute.
    20. Feil, J.-H. & Anastassiadis, F. & Mußhoff, O. & Schilling, P., 2015. "Analysing Farmers’ Use of Price Hedging Instruments: An Experimental Approach," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 50, March.

    More about this item

    Keywords

    Choice experiments; Mixed logit; Latent classes; Individual-specific estimates; Non-market valuation;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2004.132. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alberto Prina Cerai (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.