Efficient conjoint choice designs in the presence of respondent heterogeneity.

The authors propose a fast and efficient algorithm for constructing D-optimal conjoint choice designs for mixed logit models in the presence of respondent heterogeneity. With this new algorithm, the construction of semi-Bayesian D-optimal mixed logit designs with large numbers of attributes and attribute levels becomes practically feasible. The results from the comparison of eight designs (ranging from the simple locally D-optimal design for the multinomial logit model and the nearly orthogonal design generated by Sawtooth (CBC) to the complex semi-Bayesian mixed logit design) across wide ranges of parameter values show that the semi-Bayesian mixed logit approach outperforms the competing designs not only in terms of estimation efficiency but also in terms of prediction accuracy. In particular, it was found that semi-Bayesian mixed logit designs constructed with large heterogeneity parameters are most robust against the misspecification of the values for the mean of the individual level coefficients for making precise estimations and predictions.Keywords:semi-Bayesianmixedlogitdesign,heterogeneity,predictionaccuracy,multinomiallogitdesign,model-robustdesign,D-optimality,algorithmAlgorithm; D-Optimality; Heterogeneity; Model-robust design; Multinomial logit design; Prediction accuracy; Semi-Bayesian mixed logit design;

Modelling Heterogeneity in Patients' Preferences for the Attributes of a General Practitioner Appointment

This paper examines the distribution of preferences in a sample of patients who responded to a discrete choice experiment on the choice of general practitioner appointments. In addition to standard logit, mixed and latent class logit models are used to analyse the data from the choice experiment. It is found that there is significant preference heterogeneity for all the attributes in the experiment and that both the mixed and latent class models lead to significant improvements in fit compared to the standard logit model. Moreover, the distribution of preferences implied by the preferred mixed and latent class models is similar for many attributes.discrete choice experiment; mixed logit; latent class logit

Estimating nonparametric mixed logit models via EM algorithm

The aim of this paper is to describe a Stata routine for the nonparametric estimation of mixed logit models using a Expectation-Maximisation algorithm. We also compare the performance of our estimator with respect to more typical parametric mixed logit models estimated by means of Simulated Maximum Likelihood.EM algorithm; latent class; mixed logit model; unobserved heterogeneity

Taste Heterogeneity, IIA, and the Similarity Critique

The purpose of this paper is to show that allowing for taste heterogeneity does not address the similarity critique of discrete-choice models. Although IIA may technically be broken in aggregate, the mixed logit model allows neither a given individual nor the population as a whole to behave with perfect substitution when facing perfect substitutes. Thus, the mixed logit model implies that individuals behave inconsistently across choice sets. Estimating the mixed logit on data in which individuals do behave consistently can result in biased parameter estimates, with the individuals' tastes for desirable attributes being systemically undervalued.Heterogeneity, Mixed Logit, Independence from Irrelevant Alternatives, IIA, Similarity Critique, Ecological Fallacy

Halton Sequences for Mixed Logit

The simulation variance in the estimation of mixed logit parameters is found, in our application, to be lower with 100 Halton draws than with 1000 random draws. This finding confirms Bhat's (1999a) results and implies significant reduction in run times for mixed logit estimation. Further investigation is needed to assure that the result is not quixotic or masking other issues.

Dual Income Tax Reform in Germany. A Microsimulation Approach

This paper assesses the impact on household labor supply of a Dual Income Tax reform in Germany. It relies on GMOD, a population-based tax-benefit microsimulation model, and uses flexible mixed logit simulation estimators.Dual Income Tax, Labor Supply, Mixed Logit

Measurement of Cannibalism Effects in buying experiments using Mixed Logit Models - The Example of a new Brand of the “Fruits of Lake Constance” Association -

One fundamental assumption of discrete choice regression is the assumption of independence of irrelevant alternatives (IIA). According to the IIA assumption no correlation is allowed between brands in buying experiments. As a consequence, in market simulations all remaining brands gain at the ratio of their starting market share if one brand is excluded from the simulation set. This often does not reflect the reality at the point-of-sale. Mixed-logit models offer the advantage that the IIA-assumption is completely relaxed. What is more, simulations based on mixed logit are able to model cannibalism effects. This paper applies mixed logit to buying behaviour research. A case study is presented where the introduction of a new apple brand at the German discounter “Penny” is simulated in a buying experiment.Mixed Logit Model; IIA-assumption; cannibalism effect; choice experiment; apples

Angler Heterogeneity and the Species-Specific Demand for Marine Recreational Fishing

In this study we assess the viability of single-species recreation demand models given commonly available data sets. Using the 2000 MRFSS southeast intercept data combined with the economic add-on, we determine that the MRFSS data will support only a few species-specific recreation demand models. Considering species of management interest in the southeast, we focus on dolphin, king mackerel, red snapper and red drum. We examine single-species recreational fishing behavior using random utility models of demand. We explore mixed logit (i.e., random parameter) logit and finite mixture (i.e., latent class logit) models for dealing with angler heterogeneity. We compare these to the commonly used conditional and nested logit models in terms of the value of catching (and keeping) one additional fish. Mixed logit models illustrate that the value of catch can be highly heterogeneous and, in some cases, can include both positive and negative values. The finite mixture model generates value estimates that were some times strikingly different than conditional, nested and mixed logit models. Preference heterogeneity is significant within the MRFSS data. We find evidence that single-species models outperform multiple species models and recreational values differ. Key Words: marine recreational fishing, single-species demand, preference heterogeneity models

Valuing Farmland Protection with Choice Experiments That Incorporate Preference Heterogeneity: Does Policy Guidance Depend On the Econometric Fine Print?

Although mixed logit models are common in stated preference applications, resulting welfare estimates can be sensitive to minor changes in specification. This can be of critical relevance for policy and welfare analysis, particularly if policymakers are unaware of practical implications. Drawing from an application to agricultural conservation in Georgia, this paper quantifies the sensitivity of welfare estimates to common variations in mixed logit specification and assesses practical implications for policy guidance. Results suggest that practitioners may wish to reevaluate modeling and reporting procedures to reflect the welfare and policy implications of common but often unnoticed variations in model specification.Willingness to Pay, Conservation Easement, PACE, Mixed Logit, Stated Preference, Environmental Economics and Policy, Land Economics/Use, Research Methods/ Statistical Methods, Q24, Q51,

INVESTIGATING PREFERENCES FOR ENVIRONMENT FRIENDLY PRODUCTION

This paper reports some preliminary results on a mixed logit random utility analysis of conjoint data from costumers' preferences over agricultural products. The data are collected via a telematic sample representative of Italian households. The survey instrument was implemented via a computer supported system. A multivariate normal full correlation structure is imposed in the mixed logit estimation and the implications of such a taste structure are examined.