Substitution effects in spatial discrete choice experiments
Substitution effects in spatial discrete choice experiments
This paper explores spatial substitution patterns using a choice experiment to estimate the non-market benefits of environmental quality improvements at different sites presented as labelled alternatives. We develop a novel modelling approach to estimate possible disproportional substitution patterns among these alternatives by including cross-effects in site-specific utility functions, combining mixed and universal logit models. The latter model allows for more flexibility in substitution patterns than random parameters and error-components in mixed logit models. The model is relevant to any discrete choice study that compares multiple sites that vary in their comparability and that may be perceived as (imperfect) substitutes. Applying the model in an empirical case study shows that accounting for cross-effects results in a better model fit. We discuss the validity of welfare estimates based on the inclusion of cross-effects. The results demonstrate the importance of accounting for substitution effects in spatial choice models with the aim to inform policy and decision-making.
Cross-effects, Spatial choice experiments, Substitution, Universal logit model
323-349
Schaafsma, Marije
e6fd9d79-98e5-4bd7-8250-c90cb8ab4ad2
Brouwer, Roy
e05861b5-5961-45cd-9de0-883067908c5e
24 August 2019
Schaafsma, Marije
e6fd9d79-98e5-4bd7-8250-c90cb8ab4ad2
Brouwer, Roy
e05861b5-5961-45cd-9de0-883067908c5e
Schaafsma, Marije and Brouwer, Roy
(2019)
Substitution effects in spatial discrete choice experiments.
Environmental and Resource Economics, 75 (2), .
(doi:10.1007/s10640-019-00368-1).
Abstract
This paper explores spatial substitution patterns using a choice experiment to estimate the non-market benefits of environmental quality improvements at different sites presented as labelled alternatives. We develop a novel modelling approach to estimate possible disproportional substitution patterns among these alternatives by including cross-effects in site-specific utility functions, combining mixed and universal logit models. The latter model allows for more flexibility in substitution patterns than random parameters and error-components in mixed logit models. The model is relevant to any discrete choice study that compares multiple sites that vary in their comparability and that may be perceived as (imperfect) substitutes. Applying the model in an empirical case study shows that accounting for cross-effects results in a better model fit. We discuss the validity of welfare estimates based on the inclusion of cross-effects. The results demonstrate the importance of accounting for substitution effects in spatial choice models with the aim to inform policy and decision-making.
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Schaafsma-Brouwer2020_Article_SubstitutionEffectsInSpatialDi
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Published date: 24 August 2019
Additional Information:
Funding Information:
This study was carried out and financed under the EU DG Research F6 Project AquaMoney (SSPI-022723).
Publisher Copyright:
© 2019, The Author(s).
Keywords:
Cross-effects, Spatial choice experiments, Substitution, Universal logit model
Identifiers
Local EPrints ID: 449550
URI: http://eprints.soton.ac.uk/id/eprint/449550
ISSN: 0924-6460
PURE UUID: fb3d420c-9ef1-4d1b-8d76-9d1ced0e0d1b
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Date deposited: 07 Jun 2021 16:32
Last modified: 17 Mar 2024 12:46
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Contributors
Author:
Marije Schaafsma
Author:
Roy Brouwer
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