Selecting random parameters in discrete choice experiment for environmental valuation: a simulation experiment

Mariel, Petr, de Ayala, Amaya, Hoyos, David and Abdullah, Sabah (2013) Selecting random parameters in discrete choice experiment for environmental valuation: a simulation experiment. Journal of Choice Modelling, 7 44-57. doi:10.1016/j.jocm.2013.04.008


Author Mariel, Petr
de Ayala, Amaya
Hoyos, David
Abdullah, Sabah
Title Selecting random parameters in discrete choice experiment for environmental valuation: a simulation experiment
Journal name Journal of Choice Modelling
ISSN 1755-5345
Publication date 2013-06
Sub-type Article (original research)
DOI 10.1016/j.jocm.2013.04.008
Open Access Status
Volume 7
Start page 44
End page 57
Total pages 14
Place of publication London, United Kingdom
Publisher Elsevier
Language eng
Abstract This paper examines two tests commonly used to select random parameters in choice modelling: the Lagrange Multiplier (LM) test as proposed by McFadden and Train (2000) and the t-statistic of the deviation of the random parameter. A simulation exercise based on a real case study is carried out assuming cross-sectional data and two panel data settings. These data structures together with different distributional assumptions allow an examination of the empirical size and power of the two analysed tests. The key results indicate that the power of these tests depends on the data structure as well as on the spread and type of the parameter distribution. Furthermore, the LM test is the only one with empirical size not significantly different from the theoretical value.
Keyword Choice experiment
Preference heterogeneity
Random parameter logit
Simulation
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Biological Sciences Publications
 
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Created: Wed, 27 Aug 2014, 16:19:45 EST by Gail Walter on behalf of School of Biological Sciences