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On the use of flexible mixing distributions in WTP space: an induced value choice experiment
Author(s) -
Bazzani Claudia,
Palma Marco A.,
Nayga Rodolfo M.
Publication year - 2018
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.12246
Subject(s) - mixed logit , log normal distribution , mathematics , legendre polynomials , willingness to pay , mixing (physics) , statistics , econometrics , parameter space , space (punctuation) , value (mathematics) , distribution (mathematics) , logit , logistic regression , economics , mathematical analysis , physics , computer science , quantum mechanics , microeconomics , operating system
In this study, we use data from an induced value choice experiment to compare estimates from mixed logit models in willingness to pay (WTP) space using different parameter distributional assumptions. Specifically, we test differences in WTP estimates when using flexible parameter mixing distributions (i.e. Legendre polynomials, step functions and splines) and conventional parameter distributions (normal and lognormal). Similar WTP estimates are obtained. However, we observe that WTP estimates are statistically different from the induced value when conventional distributions are assumed, but they are not when more flexible distributions are assumed. This suggests that flexible distributions can provide more reliable WTP estimates.