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Simulations
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Scarpa et al., 2008
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We compare two approaches for estimating the distribution of consumers’ willingness to pay (WTP)
in discrete choice models. The usual procedure is to estimate the distribution of the utility coefficients
and then derive the distribution of WTP, which is the ratio of coefficients. The alternative is to estimate
the distribution of WTP directly. We apply both approaches to data on site choice in the Alps. We find
that the alternative approach fits the data better, reduces the incidence of exceedingly large estimated
WTP values, and provides the analyst with greater control in specifying and testing the distribution of
WTP.
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Hynes et al., 2008
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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 hetero-
geneity 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. Recre-
ationalists’ 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.
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Revelt and Train, 1998
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Abstract--Mixed logit models, also called random-parameters or error-components logit, are a generalization of standard logit that do not exhibit the restrictive "independence from irrelevant alternatives" property and explicitly account for correlations in unobserved utility over repeated choices by each customer. Mixed logits are estimated for households' choices of appliances under utility-sponsored programs that offer rebates or loans on high-efficiency appliances.
