understanding heterogeneous preferences in random utility models a latent class approach a finite mixture approach toconditional logit models is developed in whichlatent classes are used to promoteunderstanding of systematic heterogeneity the model is applied to wilderness recreationin which a branded choice experiment involvingchoice of one park from a demand system wasadministered to a sample of recreationists the basis of membership in the classes orsegments in the sample involved attitudinalmeasures of motivations for taking a trip aswell as their stated preferences overwilderness park attributes the econometricanalysis suggested that four classes of peopleexist in the sample using the model toexamine welfare measures of some hypotheticalpolicy changes identified markedly differentwelfare effects than the standard singlesegment model and provided insight into thedifferential impact of alternative policies

public preferences for hydrogen buses comparing interval data ols and quantile regression approaches we use a quantile regression qr approach to analyse contingent valuation estimates of public willingness to pay wtp for the air and noise pollution reductions associated with the introduction of hydrogen buses in london qr results show that variables that were not significant in interval regression or ordinary least squares regression become significant at certain quantiles along the wtp distribution in addition the determinants of wtp at the lower tail of the distribution differ from those at the higher end of the distribution our findings illustrate the usefulness of quantile regression methods for analysing contingent valuation data enhancing our understanding of the determinants of willingness to pay

qualitative and quantitative evidence on the true local welfare costs of forest conservation in madagascar are discrete choice experiments a valid ex ante tool summary protected areas may impose local welfare costs through the enforcement of use restrictions predicting their welfare impacts before their establishment could help with the design of compensation schemes discrete choice experiments dces are increasingly used for ex ante evaluations but their validity is largely untested in low income settings using a case study of a new redd reducing emissions from deforestation and forest degradation project in eastern madagascar we explore the validity of dces in two ways i whether the estimates of welfare costs derived from dce are affected by respondents prior experience of conservation ii whether dce results have high theoretical and content validity we surveyed households who have varying degrees of experience of restrictions to swidden agriculture we also qualitatively debriefed a sub sample of respondents to better understand their thought processes latent class analysis shows that dce outcomes vary with conservation experience households more experienced with forest protection are less willing to trade off rights to clear forest for swidden agriculture with any compensatory interventions whereas less experienced households highly favor support for alternative agricultural techniques and a secure right to clear one hectare of forest although the results show apparent non attendance to some attributes e g cash payments qualitative debriefings suggest that respondents infact do expect relatively low or no utility from the given attributes and hence have theoretically valid preferences similarly the dce has generally high content validity although dce can elicit current preferences in this context using ex ante dce to estimate the welfare costs of such a long term intervention requires caution we conclude that it is difficult to robustly estimate compensation in advance of an intervention there is therefore a need to rethink conservation approaches and the feasibility of achieving fair compensations for conservation imposed restrictions

modeling discrete choices with augmented perception hurdles through creating latent perception hurdles associated with each attribute considered in a stated conjoint experiment this article describes a model that augments the conventional approach by utilizing the importance ratings provided by respondents prior to the discrete choice stage the resulting perception hurdle logit phl model has both advantages and disadvantages compared to the conditional logit cl and mixed logit models although the proposed model may not have the best within sample fit it outperforms the other two models in predicting choices in a hold out sample in addition the proposed model is also used to reveal that depending on their own characteristics and the process of the survey respondents may employ an array of different decision strategies

evaluating the relative strength of product specific factors in fuel switching and stove choice decisions in ethiopia a discrete choice model of household preferences for clean cooking alternatives switching from conventional stoves to modern clean safe and efficient stoves will improve health and social welfare for the 2 7 billion people worldwide that lack reliable access to modern energy services in this paper we critically review some key theoretical dimensions of household consumer behaviour in switching from traditional biomass cooking stoves to modern efficient stoves and fuels we then describe the results of empirical research investigating the determinants of stove choice focusing on the relative strength of product specific factors across three wealth groups a stated preference survey and discrete choice model were developed to understand household decision making associated with cooking stove choice in addis ababa ethiopia the study found that with the exception of price and usage cost factors for the high wealth group the product specific factors that were investigated significantly affect stove and fuel choices the relative strength of factors was assessed in terms of marginal willingness to pay and provides some evidence that consumer preference for higher quality fuels and stoves tends to increase with increasing wealth

a finite mixture logit model of recreational angling with serially correlated random utility this article examines two issues concerning the trip taking behavior of recreational anglers over the course of a season the first is whether the random component of trip utility is serially correlated across trip occasions the second is the heterogeneity of preferences among anglers recent research has examined heterogeneity among recreational trip takers using random parameters models in this article the population of anglers is instead cast as a collection of several subpopulations distinguished by angler preferences and the method of finite mixtures is used to identify these subpopulations copyright 2002 oxford university press

environmental damage evaluation in a willingness to accept scenario a latent class approach based on familiarity in this paper we report on the results of the application of a latent class model that was designed to identify and characterize unobserved preference heterogeneity in the context of a willingness to accept wta framework involving negative environmental externalities stemming from the expansion of the port of valencia we investigated the hypothesis that respondents with greater familiarity with the targeted good and any related environmental damage would demand more compensation that is they would have a significantly higher wta based on respondents familiarity with the port of valencia and their pre existing knowledge about the negative consequences of its potential expansion three clusters based on six indicators are identified results show that contrary to what might be expected familiarity with a public good does not in all cases have a significant effect on stated wta

valuing smart meters abstract this paper assesses to what extent consumers are willing to make use of the features and capabilities offered by smart meters via a choice experiment households are offered the choice between a set of smart meters described by six attributes impact on the comfort and privacy level functionality visibility cost savings and investment outlay we estimate a main effects conditional logit model and a main effects random parameter logit model including interactions with socio demographic characteristics the results show that households have heterogeneous preferences for some attributes but not for others the estimates are used to assess marginal willingness to pay values from a policy perspective our findings suggest that sufficient effort should be devoted to designing the smart metering devices and to informing households without careful preparation a mandatory or voluntary roll out of smart meters risks to be unsuccessful because device characteristics do not meet consumer needs

valuing genetic resources in peasant economies the case of hairless creole pigs in yucatan abstract we report the results of a choice experiment study to model preferences over a selection of breed traits of creole pigs the study was conducted amongst households of backyard producers and small farmers rearing this local breed in yucatan mexico hypothetical choice data were collected to estimate the preference of households over alternative pigs profiles whose attributes distinguish creole pigs from the potentially more productive yet less adapted exotic breeds currently threatening to severely displace this locally adapted animal genetic resource angr the observed choices are employed to estimate a series of random utility models whose results are first tested for preference equality between households and small farmers then endogenous segmentation is allowed within households by means of latent class models stated preference based estimates are found to be of the same magnitude as revealed preference producers costs as a consequence the method is deemed to be appropriate for the valuation of non market functions in production estimates conditional on household characteristics are then presented and discussed

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

do protest responses to a contingent valuation question and a choice experiment differ it is suggested that the number of protest responses in stated preference surveys depends inter alia on the valuation method used choice experiments ce are said to generate a lower number of protest responses than contingent valuation cv however no comparison of both methods with respect to protest responses has been conducted to date we used both ce and cv in a survey on forest biodiversity in two german regions protest beliefs were measured for all respondents irrespective of whether they were willing to pay or not the results show no clear pattern of differences between ce and cv regarding protest beliefs and protest responses using an attitude scale based on respondents protest beliefs we see a significant negative effect of this attitude on willingness to pay in both methods however in one of the two study regions the effect is weaker in ce than in cv

random regret minimization exploration of a new choice model for environmental and resource economics this paper introduces the discrete choice model paradigm of random regret minimization rrm to the field of environmental and resource economics the rrm approach has been very recently developed in the context of travel demand modelling and presents a tractable regret based alternative to the dominant choice modelling paradigm based on random utility maximization theory rum theory we highlight how rrm based models provide closed form logit type formulations for choice probabilities that allow for capturing semi compensatory behaviour and choice set composition effects while being equally parsimonious as their utilitarian counterparts using data from a stated choice experiment aimed at identifying valuations of characteristics of nature parks we compare rrm based models and rum based models in terms of parameter estimates goodness of fit elasticities and consequential policy implications

a latent class approach to tourists length of stay abstract in this paper a conditional demand function is estimated for the length of stay at a tourist destination the microeconomic model specifies the demand for the length of stay conditional on the remaining holiday characteristics that the tourist has chosen the destination type of accommodation etc the empirical model uses a latent class truncated poisson regression which acknowledges the existence of groups or segments of demand with different preferences in the case under study a distinction is made between two segments with a preference for either a longer or shorter holiday the statistical model also resolves a problem of multimodality acknowledged in previous analyses to be one of the main characteristics of this variable

a latent class approach to modeling endogenous spatial sorting in zonal recreation demand models a method for incorporating unobserved heterogeneity into aggregate count data frameworks is presented and used to control for endogenous spatial sorting in zonal recreation models the method is based on latent class analysis which has become a popular tool for analyzing heterogeneous preferences with individual data but has not yet been applied to aggregate count data the method is tested using data on backcountry hikers for a southern california study site and performs well for relatively small numbers of classes the latent class model produces substantially smaller welfare estimates compared to a constrained version that assumes homogeneity throughout the population

a joint latent class model combining likert scale preference statements with choice data to harvest preference heterogeneity in addition to choice questions revealed and stated choices preference surveys typically include other questions that provide information about preferences preference statement data include questions on the importance of different attributes of a good or the extent of agreement with a particular statement the intent of this paper is to model and jointly estimate preference heterogeneity using stated preference choice data and preference statement data the starting point for this analysis is the belief that the individual has preferences and both his her choices and preference statements are manifestations of those preferences our modeling contribution is linking the choice data and preference statement data in a latent class framework estimation is straightforward using the e m algorithm even though our model has hundreds of preference parameters our estimates demonstrate that 1 within a preference class the importance anglers associate with different green bay site characteristics is in accordance with their responses to the preference statements 2 estimated across class utility parameters for fishing green bay are affected by the preference statement data 3 estimated across class preference statement response probabilities are affected by the inclusion of the choice data and 4 both data sets influence the number of classes and the probability of belonging to a class as a function of the individual s type

using angler characteristics and attitudinal data to identify environmental preference classes a latent class model a latent class model of environmental preference groups is developed and estimated with only the answers to a set of attitudinal questions economists do not typically use this type of data in estimation group membership is latent unobserved the intent is to identify and characterize heterogeneity in the preferences for environmental amenities in terms of a small number of preference groups the application is to preferences over the fishing characteristics of green bay anglers answered a number of attitudinal questions including the importance of boat fees species catch rates and fish consumption advisories on site choice the results suggest that green bay anglers separate into a small number of distinct classes with varying preferences and willingness to pay for a pcb free green bay the probability that an angler belongs to each class is estimated as function of observable characteristics of the individual estimation is with the expectation maximization e m algorithm a technique new to environmental economics that can be used to do maximum likelihood estimation with incomplete information as explained a latent class model estimated with attitudinal data can be melded with a latent class choice model

relating environmental attitudes and contingent values how robust are methods for identifying preference heterogeneity we assess the importance and robustness of cluster analysis and latent class analysis as methods to account for unobserved heterogeneity we provide a critique and comparison of both methods in the context of measuring environmental attitudes and a contingent valuation study involving endangered species we find strong evidence of robustness for these methods group characterization and assignment of individuals to groups are similar between methods and willingness to pay estimates are consistent in addition there are significant differences in willingness to pay across environmental attitudinal groups and we find that accounting for unobservable heterogeneity provides a significantly better fitting model

effects on welfare measures of alternative means of accounting for preference heterogeneity in recreational demand models multiattribute revealed preference data are used to investigate heterogeneity in a sample of kayakers for a panel of whitewater sites in ireland this article focuses on a comparison of preference heterogeneity using a random parameter logit model with correlated tastes and a latent class model in terms of the implications for welfare measures of environmental quality and site access changes recreationalists skill levels are found to affect preferences in both approaches statistics for the estimated distribution of welfare changes for the average respondent are computed for changes in site attributes but contrary to previous work these are found to be of similar magnitude

a semiparametric smooth coefficient estimator for recreation demand we introduce a semiparametric smooth coefficient estimator for recreation demand data that allows more flexible modeling of preference heterogeneity we show that our sample of visitors each has an individual statistically significant price coefficient estimate leading to clearly nonparametric consumer surplus and willingness to pay wtp distributions we also show mean wtp estimates that are different in economically meaningful ways for every demographic variable we have for our sample of beach visitors this flexibility is valuable for future researchers who can include any variables of interest beyond the standard demographic variables we have included here and the richer results price elasticities consumer surplus and wtp estimates are valuable to planners and policymakers who can easily see how all these estimates vary with characteristics of the population of interest

capital controls and international capital market segmentation the evidence from the japanese and american stock markets the paper focuses on two countries japan and the u s to test the integration of capital markets in japan the enactment of the foreign exchange and foreign trade control law in december of 1980 amounted to a true regime switch that virtually eliminated capital controls using multifactor asset pricing models we show that the price of risk in the u s and japanese stock markets was different before but not after the liberalization this evidence supports the view that governments are the source of international capital market segmentation the notion that world capital markets are perfectly integrated is central to most theoretical developments in both international finance and macroeconomics indeed it also lies behind much of the recent international policy discussion capital markets are integrated if assets with perfectly correlated rates of return have the same price regardless of the location in which they are traded 1 segmentation may arise either because of government impediments to capital movements or because of individuals attitudes or irrationality if the hypothesis that the international capital markets are integrated is rejected there is still an important empirical question left unanswered which is related to the source of segmentation while there is a rich body of theoretical research on international market integration only a few studies have tried to investigate this important question empirically a first group of empirical studies on market integration has generally adopted

protesting and justifying a latent class model for contingent valuation with attitudinal data this article develops a latent class model for estimating willingness to pay wtp for public goods using simultaneously contingent valuation cv and attitudinal data to identify individuals with similar characteristics such as wtp and protest attitudes we find evidence that the answer to the cv question influences the responses to the attitudinal questions in our case this influence reflects rational behavior budget constraint issues and justification biases related to protest reasons such as lack of trust in institutions or fairness issues with respect to the distribution of the burden of preservation the results from our empirical application confirm the importance of accounting for those biases

risk aversion and willingness to pay for energy efficient systems in rental apartments abstract this paper uses a random utility model to estimate consumers valuation of energy efficient insulation and ventilation systems in rental apartments given consumers limited experience in residential buildings and the perceived uncertainty about their comfort benefits and resulting energy savings these relatively new technologies might be undervalued by risk averse consumers using the concept of certainty equivalence this paper proposes a model to assess the consumers risk aversion for adopting energy efficient systems these systems are treated as risky assets while conventional commodities are assumed to be risk free the curvature of the utility function is interpreted as a measure of aversion to perceived risks as opposed to explicit risks measured by observed variances the proposed formulation is applicable in stated preference data with qualitative variables the model is applied to data from a choice experiment conducted among 264 apartment tenants in switzerland the estimated curvatures reject the risk neutrality hypothesis the range of the estimated risk premiums suggests that risk considerations remain a central issue in dealing with energy efficiency in residential buildings the analysis also indicates that assuming same risk attitudes toward new and conventional systems could bias the estimates of the willingness to pay especially when the system is comprised of several components

do the oecd 24 month horizon growth forecasts for the g7 countries contain information the oecd produces two year ahead growth forecasts for the g7 countries since 1987 these forecasts have never been evaluated a regression is developed that tests for the information content of the forecasts the idea is that this content is the added value forecasters incorporate in their forecasts the information content is defined relative to the forecast for the previous year in the end the added value contained in the current year forecast is calculated relative to the last observation the test consists in checking whether the information content reduces the forecasts error 1 the authors of the present study refer to mincer and zarnowitz 1969 mcnees 1988 stekler 1991 and fildes and stekler 2002 for a discussion of the evaluation techniques of forecasts the study begins with a calculation of the usual accuracy statistics these indicate an extreme low quality for the forecasts the regression tests support this conclusion although the forecasts for japan do possess some information al