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Influence of Choice Set Considerations in Modeling the Benefits From Improved Water Quality
Author(s) -
Peters T.,
Adamowicz W. L.,
Boxall P. C.
Publication year - 1995
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/95wr00975
Subject(s) - set (abstract data type) , choice set , quality (philosophy) , sample (material) , econometrics , choice modelling , computer science , economic model , discrete choice , economics , mathematics , statistics , microeconomics , philosophy , epistemology , programming language , chemistry , chromatography
Random utility models have become popular tools for the measurement of economic benefits from environmental quality changes. These models, however, require assumptions about the choice sets held by the individuals in the sample. Typically, researchers specify the choice set and assume that individuals are aware of all elements of this set. This paper compares the standard approach with an alternative that uses an estimate of each sampled individual's specific choice set. The latter approach produces model parameters and welfare estimates that are quite diflferent from those using standard assumptions.