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

increasing consumer participation rates for green pricing programs a choice experiment for south korea abstract this study examines the factors that can increase consumer participation rates in green pricing programs by conducting a choice experiment in south korea estimation results were obtained from a conditional logit conditional logit with interaction terms random parameter logit random parameter logit with correlation and individual level coefficient models a novelty of our analysis was the consideration of monetary and non monetary incentives as factors influencing consumer uptake in green pricing programs the estimation results show that increased consumer participation in green pricing programs is positively linked with green energy sources that produce fewer externalities more jobs and monetary incentives such as tax credits or green mileage however there is an inverted u shaped relationship between participation rates and the share of green electricity in total electricity supply mean willingness to pay for fuel cells is highest followed by solar and wind energy estimation from the random parameter logit with allowing for correlations among random coefficients of attributes reveals that consumers are divided into green pro environment consumers and blue growth oriented consumers green consumers prefer a higher green electricity share solar or fuel cell to wind a greater proximity of green power plants to their homes and green mileage or green parks to tax credits in comparison blue consumers favor a lower green electricity share green power plants that are far from their homes and monetary incentives rather than non monetary incentives the results of this study suggest guidelines for the design of successful green pricing programs green pricing programs that are designed with information on types of green energy sources consider the distance of power plants to consumers residences focus on the share of green electricity and incorporate monetary incentives are likely to have increased consumer participation rates

alfred marshall lecture social capital as good culture to explain the extremely long term persistence more than 500 years of positive historical experiences of cooperation putnam 1993 we model the intergenerational transmission of priors about the trustworthiness of others we show that this transmission tends to be biased toward excessively conservative priors as a result societies can be trapped in a low trust equilibrium in this context a temporary shock to the return to trusting can have a permanent effect on the level of trust we validate the model by testing its predictions on the world values survey data and the german socio economic panel we also present some anecdotal evidence that these priors are reflected in novels that originate in different parts of the country jel 04 016 043 p16

measuring heterogeneous preferences for cattle traits among cattle keeping households in east africa this study employs mixed logit and latent class models to examine preferences for cattle traits with a focus on heterogeneity among cattle keepers using choice experiment data of 506 cattle keeping households in kenya and ethiopia the findings indicate the existence of preference heterogeneity based on cattle production systems highly valued cattle traits for the cropping systems include traction fitness and trypanotolerance while traits associated with herd increase are considered important in pastoral systems considering heterogeneity within population segments provides a framework for adapting breeding policy interventions to specific producer segments by integrating preferred traits in a breed improvement program

heterogeneity in preferences for woody biomass energy in the us mountain west abstract millions of acres of public forest in the us mountain west are substantially degraded and are in need of restoration mechanized restoration treatments can improve forest health and reduce the likelihood of severe wildfire these treatments produce some timber and substantial amounts of forest residues that can be used to generate renewable energy and displace fossil fuels using the choice modeling method this study investigates social preferences for generation of energy with woody biomass produced by restoration treatments on public forests in the mountain west both multinomial logit and latent class logit lcl models are fit to the data and used to estimate marginal willingness to pay mwtp for increased amounts of woody biomass energy generation and important associated co benefits and costs positive and statistically significant mwtp is found for the number of homes powered with wood the extent of healthy forests avoiding increases in the number of large wildfires and local air quality significant heterogeneity was found in respondent preferences for the attributes the heterogeneity can be explained in part by sociodemographic and attitudinal characteristics of respondents the lcl revealed four classes of respondents with distinct preferences revealing conflicting viewpoints toward forest management for woody biomass energy generation

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

testing choice experiment for benefit transfer with preference heterogeneity benefit transfer is a cost effective method for estimating the value of environmental goods that relies on information obtained in previous studies the multiattribute approach of choice experiments should provide advantages in terms of benefit transfer allowing differences in environmental improvements between sites as well as differences in socioeconomic and attitude characteristics between respondent populations this article investigates the capability of choice experiment method to be used in environmental benefit transfer when a random parameters approach is used to allow for preference heterogeneity we find that the inclusion of respondents taste heterogeneity reduces the magnitude of the transfer error

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

technological gap scale economy and china s industrial energy demand abstract the industrial sector in china is energy intensive and accounts for more than 60 of the nation s total energy consumption demand narrating the story behind the growth of china s industrial energy consumption could help us understand the past and prepare for the future this paper aims to investigate the factors affecting china s industrial energy consumption in the 21st century by using an extended production theoretical decomposition approach pda with considering the technological gap and scale of the economy effects the new proposed decomposition framework includes four new factors namely the energy technological gap the output technological gap energy scale efficiency and output scale efficiency the results show that in the 21st century the energy consumption of china s industry increased by more than one billion tons of standard coal the expansion of the industrial economy is a dominant driver of china s industrial energy consumption while potential energy intensity energy technology and output technology are the three largest energy saving factors in addition to the conventional factors the newly proposed factors also have important effects on china s industrial energy consumption specifically output scale efficiency is an energy saving factor while the energy technological gap output technological gap and energy scale efficiency are drivers of energy consumption this suggests that china s industry is at the stage of returns to scale that is beneficial to output performance but harmful to energy performance meanwhile the widening of the industrial technological gaps has negative impacts on china s industrial energy conservation the proposed decomposition approach can provide information that cannot be obtained from traditional approaches and it can also be applied to many other cases for investigating feasible paths of energy saving and emissions reduction

combining revealed preference data with stated preference data a latent class approach a substantial literature exists combining data from revealed preference rp and stated preference sp sources aimed either at testing for the convergent validity of the two approaches used in nonmarket valuation or as a means of drawing on their relative strengths to improve the ultimate estimates of value in doing so it is assumed that convergence of the two elicitation approaches is an all or nothing proposition i e the rp and sp data are either consistent with each other or they are not the purpose of this paper is to propose an alternative framework that allows for possible divergence among individuals in terms the consistency between their rp and sp responses in particular we suggest the use of a latent class approach to segment the population into two groups the first group has rp and sp responses that are internally consistent while the remaining group exhibits some form of inconsistent preferences an em algorithm is employed in an empirical application that draws on the alberta and saskatchewan moose hunting data sets used in earlier combined rp and sp exercises the empirical results suggest that somewhere between one third and one half the sample exhibits consistent preferences we also examine differences in welfare estimates drawn from the two classes

learning by doing and learning from others human capital and technical change in agriculture household level panel data from a nationally representative sample of rural indian households describing the adoption and profitability of high yielding seed varieties hyvs associated with the green revolution are used to test the implications of a model incorporating learning by doing and learning spillovers the estimates indicate that i imperfect knowledge about the management of the new seeds was a significant barrier to adoption ii this barrier diminished as farmer experience with the new technologies increased iii own experience and neighbors experience with hyvs significantly increased hyv profitability and iv farmers do not fully incorporate the village returns to learning in making adoption decisions

revealing additional dimensions of preference heterogeneity in a latent class mixed multinomial logit model latent class models offer an alternative perspective to the popular mixed logit form replacing the continuous distribution with a discrete distribution in which preference heterogeneity is captured by membership of distinct classes of utility description within each class preference homogeneity is usually assumed although interactions with observed contextual effects are permissible a natural extension of the fixed parameter latent class model is a random parameter latent class model which allows for another layer of preference heterogeneity within each class this article sets out the random parameter latent class model and illustrates its applications using a stated choice data set on alternative freight distribution attribute packages pivoted around a recent trip in australia

who cares about environmental stigmas and does it matter a latent segmentation analysis of stated preferences for real estate this article uses latent segmentation analysis to estimate the benefits of contaminant cleanup in waukegan harbor illinois survey responses to attitudinal and perception questions provide significant information about the existence of distinct preference groups by comparison the predictive usefulness of demographic covariates is unclear the expected aggregate willingness to pay of waukegan homeowners for full cleanup is approximately equivalent to a 20 increase in the market value of homes the aggregate estimate is little affected by the identification of preference clusters

preference heterogeneity for renewable energy technology abstract this study explores heterogeneity in individual willingness to pay wtp for a public good using several different variants of the multinomial logit mnl model for stated choice data these include a simple mnl model with interaction terms between respondent characteristics and attribute levels a latent class model a random parameter mixed logit model and a hybrid random parameter latent class model the public good valued was an increase in renewable electricity generation the models consistently show that preferences over renewable technologies are heterogeneous among respondents but that the degree of heterogeneity differs for different renewable technologies specifically preferences over solar power appear to be more heterogeneous across respondents than preferences for other renewable technologies comparing across models the random parameter logit model and the hybrid random parameter latent class model fit the choice data best and did the best job capturing preference heterogeneity

from tradition to modernity economic growth in a small world this paper introduces the small world model watts and strogatz nature 1998 into the theory of economic growth and investigates how increasing economic inte gration aects rm size and eciency norm enforcement and aggregate economic perfor mance when economic integration is low and local connectivity is high informal norms control entrepreneurial behavior and more integration mainly improves search for ecient investment opportunities at a higher level of economic integration neighborhood enforce ment deteriorates and formal institutions are needed to keep entrepreneurs in check a gradual take o to perpetual growth is explained by a feedback eect

choosing between internet and mail survey modes for choice experiment surveys considering non market goods in a choice experiment setup considering a non market good this paper adds to the literature on survey mode effects by providing evidence that internet surveys can be a viable alternative to traditional mail surveys when gathering feedback from a sample of respondents the case study concerns preferences for protecting different types of landscape from road encroachment when building new motorways in denmark two samples of respondents are surveyed one by internet and one by mail the performances of the two samples are compared over six different criteria response rates protest responses demographics preferences and wtp estimation precision and finally certainty in choice differences are observed for some of these criteria implying that analysts should be aware that choosing internet over mail could be accompanied by a survey mode effect however the observed differences do not translate into significant differences in the unconditional wtp estimates in most applied economic valuation studies of non market goods the main objective is in fact estimation of wtp hence in the present case the identified survey mode effects do not severely invalidate the applicability and continued use of the internet as a suitable means of collecting data for choice experiment economic valuation of non market goods

model selection for the mixed logit with bayesian estimation in this paper the mixed logit ml using bayesian methods was employed to examine willingness to pay wtp to consume bread produced with reduced levels of pesticides so as to ameliorate environmental quality from data generated by a choice experiment model comparison used the marginal likelihood which is preferable for bayesian model comparison and testing models containing constant and random parameters for a number of distributions were considered along with models in preference space and wtp space as well as those allowing for misreporting we found strong support for the ml estimated in wtp space little support for fixing the price coefficient a common practice advocated and adopted in the environmental economics literature and weak evidence for misreporting

an empirical comparison of logit choice models with discrete versus continuous representations of heterogeneity abstract currently there is an important debate about the relative merits of models with discrete and continuous representations of consumer heterogeneity in a recent jmr study andrews ansari and currim 2002 hereafter aac compared metric conjoint analysis models with discrete and continuous representations of heterogeneity and found no differences between the two models with respect to parameter recovery and prediction of ratings for holdout profiles models with continuous representations of heterogeneity fit the data better than models with discrete representations of heterogeneity the goal of the current study is to compare the relative performance of logit choice models with discrete versus continuous representations of heterogeneity in terms of the accuracy of household level parameters fit and forecasting accuracy to accomplish this goal the authors conduct an extensive simulation experiment with logit models in a scanner data context using an experimental design based on aac and other

combining discrete and continuous representations of preference heterogeneity a latent class approach unobserved preference heterogeneity has been widely recognized as a critical issue not only for modelling choice behaviour but also for policy analysis this paper examines alternative approaches for incorporating heterogeneity in recreational demand we apply a hybrid model combining discrete and continuous heterogeneity representations of tastes to capture the defining features of both the latent class and the random parameter logit specifications this model allows for the joint estimation of discrete segments and within segment heterogeneity providing a richer interpretation of preference heterogeneity a database of recreational trips to forest sites in mallorca has been used to compare the empirical performance of this hybrid approach with common specifications such as the conditional logit the random parameter logit and the latent class model

a discussion of using angler characteristics and attitudinal data to identify environmental preference classes a latent class model in the current issue of environmental and resource economics morey et al 2006 discuss a new approach to using attitudinal data in latent class modeling we compare this approach with the one taken in boxall and adamowicz 2002 in the context of a discrete choice random utility framework with heterogeneous preferences we derive the respective likelihood functions of the two approaches to show that they are structurally similar and discuss their implications for the use of attitudinal data we conclude with a discussion comparing the relative merits of latent class and random parameters mixed logit modeling offering the view that as a practical matter choosing between them depends on the analyst s judgment about the correlation of preference parameters

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

does accounting for preference heterogeneity improve the forecasting of a random utility model a case study abstract this paper examines the out of sample forecasting performance of several random utility models of recreation behavior the application is salmon fishing on lake michigan in 1996 and 1997 with the quality of fishing as measured by catch rates better in 1997 than in 1996 the models examined are a logit model two random parameters logit rpl models and a latent class logit lcl model results indicate that the rpl and lcl models forecast equally well and by at least one measure the logit model outperforms them both results also raise the possibility that recreational fishing decisions have a dynamic component

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

recreation demand models with taste differences over people we estimate random parameter logit models of anglers choice of fishing site the models generalize logit by allowing coefficients to vary randomly over anglers rather than being fixed the models do not exhibit the restrictive independence from irrelevant alternatives property of logit and can represent any substitution pattern estimation explicitly accounts for the fact that the variation in coefficients over anglers induces correlation in unobserved utility over trips by the same angler willingness to pay for improved fish stock and the value to anglers of specific sites are calculated from the models and compared with the estimates obtained from a standard logit model

social capital inclusive networks and economic performance abstract empirical studies show that the relationship between social capital and economic performance is ambiguous the paper points to the potential trade off between the sustainability of self enforcement and the magnitude of gains from trade in social networks as an explanation based on an infinitely repeated multi player prisoners dilemma it is shown how self enforcement of cooperation within a network is influenced by its inclusiveness its communication capacity and the complexity of the exchange setting the paper shows that inclusive social capital can combine both low enforcement costs and high gains from trade even in a complex exchange setting

modeling recreation demand in the presence of unobservable travel costs toward a travel price model an important issue in the application of travel cost models is the construction of a travel cost variable this paper develops an econometric approach that views travel costs as an unobserved latent variable the latent variable approach utilizes indicators to capture the role of individual travel costs in recreational demand models the latent variables approach has at least two advantages over conventional approaches one the indicators can include both traditional components such as time and distance and non traditional components such as the scenic beauty second the estimation procedure results in each indicator being valued in dollar terms

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