Modeling preference heterogeneity in stated choice data: an analysis for public goods generated by agriculture

Colombo, S., Hanley, N. and Louviere, J. (2009) Modeling preference heterogeneity in stated choice data: an analysis for public goods generated by agriculture. Agricultural Economics, 40(3), pp. 307-322. (doi: 10.1111/j.1574-0862.2009.00377.x)

Full text not currently available from Enlighten.

Abstract

Stated choice models based on the random utility framework are becoming increasingly popular in the applied economics literature. The need to account for respondents’ preference heterogeneity in such models has motivated researchers in agricultural, environmental, health, and transport economics to apply random parameter logit and latent class models. In most of the published literature these models incorporate heterogeneity in preferences through the systematic component of utility. An alternative approach is to investigate heterogeneity through the random component of utility, and covariance heterogeneity models are one means of doing this. In this article we compare these alternative ways of incorporating preference heterogeneity in stated choice models and evaluate the sensitivity of estimated welfare measures to which approach is selected. We find that a latent class approach fits our data best, but all the models perform well in terms of out-of-sample predictions. Finally, we discuss what criteria a researcher can use to decide which approach is most appropriate for a given data set.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Hanley, Professor Nicholas
Authors: Colombo, S., Hanley, N., and Louviere, J.
College/School:College of Medical Veterinary and Life Sciences > School of Biodiversity, One Health & Veterinary Medicine
Journal Name:Agricultural Economics
Publisher:Wiley
ISSN:0169-5150
ISSN (Online):1574-0862
Published Online:14 April 2009

University Staff: Request a correction | Enlighten Editors: Update this record