Willingness to Pay for Rural Landscape Improvements: Combining Mixed Logit and Random-Effects Models

Citation

Campbell D (2007) Willingness to Pay for Rural Landscape Improvements: Combining Mixed Logit and Random-Effects Models. Journal of Agricultural Economics, 58 (3), pp. 467-483. https://doi.org/10.1111/j.1477-9552.2007.00117.x

Abstract
This paper reports the findings from a discrete-choice experiment designed to estimate the economic benefits associated with rural landscape improvements in Ireland. Using a mixed logit model, the panel nature of the dataset is exploited to retrieve willingness-to-pay values for every individual in the sample. This departs from customary approaches in which the willingness-to-pay estimates are normally expressed as measures of central tendency of an a priori distribution. Random-effects models for panel data are subsequently used to identify the determinants of the individual-specific willingness-to-pay estimates. In comparison with the standard methods used to incorporate individual-specific variables into the analysis of discrete-choice experiments, the analytical approach outlined in this paper is shown to add considerable explanatory power to the welfare estimates.

Keywords
Agri-environment; discrete-choice experiments; mixed logit; panel data; random effects; rural landscapes; willingness to pay

Journal
Journal of Agricultural Economics: Volume 58, Issue 3