Abstract
We report results from a discrete choice experiment designed to assess the general public’s preferences regarding rural landscape improvements. Using a random parameters logit model to account for unobserved taste heterogeneity, we exploit the panel nature of the dataset to retrieve partworths, or willingness to pay (WTP) values, for every individual in the sample. We subsequently use the Moran’s I test statistic to gauge the spatial dependence of these estimates for a range of spatial extents. We find that WTP estimates are positively spatially autocorrelated, but the degree of homogeneity diminishes as the spatial extent becomes larger before it eventually becomes relatively stable.
This is a preview of subscription content, log in via an institution to check access.
References
Bateman, I.J., Jones, A.P., Lovett, A.A., Lake, I.R., Day, B.H.: Applying geographical information systems (GIS) to environmental and resource economics. Environ. Resour. Econ. 22(1), 219–269 (2002)
Bateman, I.J., Day, B.H., Georgiou, S., Lake, I.: The aggregation of environmental benefit values: welfare measures, distance decay and total WTP. Ecol. Econ. 60(2), 450–460 (2006)
Bhat, C.R.: Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model. Transp. Res. Part B 35(7), 677–693 (2001)
Bhat, C.R.: Simulation estimation of mixed discrete choice models using randomized and scrambled Halton sequences. Transp. Res. Part B 37(9), 837–855 (2003)
Bockstael, N.E.: Modeling economics and ecology: the importance of a spatial perspective. Am. J. Agric. Econ. 78(5), 1168–1180 (1996)
Campbell, D.: Willingness to pay for rural landscape improvements: combining mixed logit and random-effects models. J. Agric. Econ. 58(3), 467–483 (2007)
Campbell, D., Hutchinson, W., Scarpa, R.: Incorporating discontinuous preferences into the analysis of discrete choice experiments. Environ. Res. Econ. (2008a). doi: 10.1007/s10640-008-9198-8
Campbell, D., Hutchinson, W., Scarpa, R.: Using choice experiments to explore the spatial distribution of willingness to pay for rural landscape improvements. Environ. Plann. A (2008b). doi: 10.1068/a4038
Cliff, A.D., Ord, J.K.: Spatial Processes: Models and Applications. Pion Limited, London (1981)
Eade, J.D.O., Moran, D.: Spatial economic valuation: benefits transfer using Geographical Information Systems. J. Environ. Manage. 48(2), 97–110 (1996)
Ferrini, S., Scarpa, R.: Designs with a-priori information for nonmarket valuation with choice-experiments: a Monte Carlo study. J. Environ. Econ. Manage. 53(3), 342–363 (2007)
Greene, W.H., Hensher, D.A., Rose, J.M.: Using classical simulation-based estimators to estimate individual WTP values. In: Scarpa, R., Alberini, A. (eds.) Applications of Simulation Methods in Environmental and Resource Economics, pp. 17–34. Springer, Dordrecht (2005), Chapter 2
Hanley, N., Schläpfer, F., Spurgeon, J.: Aggregating the benefits of environmental improvements: distance-decay functions for use and non-use values. J. Environ. Manage. 68(3), 297–304 (2003)
Hensher, D.A., Greene, W.H.: The mixed logit model: the state of practice. Transportation 30(2), 133–176 (2003)
Hensher, D.A., Greene, W.H., Rose, J.M.: Deriving willingness-to-pay estimates of travel time savings from individual-based parameters. Environ. Plann. A 38(12), 2365–2376 (2006)
Huber, J., Train, K.E.: On the similarity of classical and Bayesian estimates of individual mean partworths. Mark. Lett. 12(3), 259–269 (2001)
Johnston, R.J., Swallow, S.K., Bauer, D.M.: Spatial factors and stated preference values for public goods: considerations for rural land use. Land Econ. 78(4), 481–500 (2002)
Lancaster, K.J.: A new approach to consumer theory. J. Polit. Econ. 74(2), 132–157 (1966)
Louviere, J.J., Hensher, D.A.: Design and analysis of simulated choice or allocation experiments in travel choice modeling. Transp. Res. Rec. 890, 11–17 (1982)
Louviere, J.J., Woodworth, G.: Design and analysis of simulated consumer choice or allocation experiments: an approach based on aggregate data. J. Mark. Res. 20(4), 350–357 (1983)
Manski, C.F.: The structure of random utility models. Theory Decis. 8(3), 229–254 (1977)
McFadden, D.L., Train, K.E.: Mixed MNL models for discrete response. J. Appl. Econ. 15(5), 447–470 (2000)
Pate, J., Loomis, J.: The effect of distance on willingness to pay values: a case study of wetlands and salmon in California. Ecol. Econ. 20(3), 199–207 (1997)
Scarpa, R., Willis, K.G., Acutt, M.: Individual-specific welfare measures for public goods: a latent class approach to residential customers of Yorkshire water. In: Koundouri, P. (ed.) Econometrics Informing Natural Resource Management, pp. 316–337. Edward Elgar, Cheltenham (2005), Chapter 14
Scarpa, R., Campbell, D., Hutchinson, W.G.: Benefits estimates for landscape improvements: sequential Bayesian design and respondents’ rationality in a choice experiment. Land Econ. 83(4), 617–634 (2007)
Sillano, M., Ortúzar, J.D.: Willingness-to-pay estimation with mixed logit models: some new evidence. Environ. Plann. A 37(3), 525–550 (2005)
Thurstone, L.L.: A law of comparative judgment. Psychol. Rev. 34, 273–286 (1927)
Train, K.E.: Discrete Choice Methods with Simulation. Press Syndicate of the University of Cambridge, Cambridge (2003)
Troy, A., Wilson, M.A.: Mapping ecosystem services: practical challenges and opportunities in linking GIS and value transfer. Ecol. Econ. 60(2), 435–449 (2006)
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Campbell, D., Scarpa, R. & Hutchinson, W.G. Assessing the spatial dependence of welfare estimates obtained from discrete choice experiments. Lett Spat Resour Sci 1, 117–126 (2008). https://doi.org/10.1007/s12076-008-0012-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12076-008-0012-6