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Logit Mixed Logit Under Asymmetry and Multimodality of WTP: a Monte Carlo Evaluation

Scarpa, R.; Franceschinis, C.; Thiene, M.

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Authors

C. Franceschinis

M. Thiene



Abstract

The logit‐mixed logit (LML) model advances choice modeling by generalizing previous parametric and semi‐nonparametric specifications and allowing retrieval of flexible taste distributions. Using standard operating conditions in the field, we report results from Monte Carlo experiments designed to assess the finite sample bias‐variance tradeoff for the LML using as a benchmark conventional Mixed logit models (MXL) under asymmetric and multimodal taste distributions. The LML specification always outperforms the MXL in terms of bias, but when the variance around modes is high the mean squared error (MSE) is lower than that of MXL only at sample sizes larger than usual and with some nuances. D‐error minimizing experimental design predicated on multinomial logit significantly reduces MSE, but no clear winner is found between polynomial, step, and spline functions for the multidimensional grid function. Analysis of empirical data from a choice experiment on tap water shows that multimodality emerges only if higher number of node parameters are used in the LML.

Citation

Scarpa, R., Franceschinis, C., & Thiene, M. (2021). Logit Mixed Logit Under Asymmetry and Multimodality of WTP: a Monte Carlo Evaluation. American Journal of Agricultural Economics, 103(2), 643-662. https://doi.org/10.1111/ajae.12122

Journal Article Type Article
Acceptance Date May 26, 2020
Online Publication Date Aug 28, 2020
Publication Date Mar 1, 2021
Deposit Date May 29, 2020
Publicly Available Date Aug 28, 2021
Journal American Journal of Agricultural Economics
Print ISSN 0002-9092
Publisher Agricultural and Applied Economics Association
Peer Reviewed Peer Reviewed
Volume 103
Issue 2
Pages 643-662
DOI https://doi.org/10.1111/ajae.12122
Public URL https://durham-repository.worktribe.com/output/1269713

Files

Accepted Journal Article (1.2 Mb)
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Publisher Licence URL
http://creativecommons.org/licenses/by-nc/4.0/

Copyright Statement
This is the peer reviewed version of the following article: Logit Mixed Logit Under Asymmetry and Multimodality of WTP: a Monte Carlo Evaluation, which has been published in final form at https://doi.org/10.1111/ajae.12122. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.







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