SV: [Limdep Nlogit List] mean wtp in logit

Fred Feinberg feinf at umich.edu
Fri Sep 19 23:09:16 EST 2008


Hi Jae,

There are many articles in the marketing and economics literature that consider how to do this. Have a look at the papers by Wertenbroch and Skiera, and also the series of papers by Sonnier, Ainslie and Otter. Google Scholar will find them for you quickly.

Fred

=====

Fred M. Feinberg
Hallman Fellow and Professor of Management
Stephen M. Ross School of Business
University of Michigan
feinf at umich.edu

Fredrik Carlsson wrote:

> Jae,
> The exact calculation would depend on model specification, and it is a little bit unclear if you are estimating using the response to the first question or not. But let us say that you only have an intercept and a bid, then the mean WTP would be the ratio between the intercept and the bid coefficient. You can use the wald-statement in limdep to calculate this and to get the standard errors of the estimate.
>
> logit;lhs=choice;rhs=one,bid$
> wald;start=b;var=varb;labels=b1,b2;
> fn1=-b1/b2$
>
> If the lhs-variables include socio-economic characteristics you could for example calculate mean WTP at sample mean, so if
> logit;lhs=choice;rhs=one,bid,female$
>
> then mean wtp is -(b1 + b3*Average number of females)/b2
>
> Fredrik Carlsson
> Professor
> Department of Economics, University of Gothenburg
> Box 640, SE-405 40 Gothenburg, Sweden
> Tel: +46 31 7864174
> Fax: +46 31 7861043
> Mobile: +46 0709 267 097
> Home page:
> http://www.handels.gu.se/econ/fredrik.carlsson/
> ________________________________________
> Från: limdep-bounces at limdep.itls.usyd.edu.au [limdep-bounces at limdep.itls.usyd.edu.au] för Jae-Hwan Han [jaehwanhan at hotmail.com]
> Skickat: den 19 september 2008 04:21
> Till: limdep at limdep.itls.usyd.edu.au
> Ämne: [Limdep Nlogit List] mean wtp in logit
>
> Hello limdepers
>
> I am trying to calculate mean willingness to pay(WTP) in logit model.
> Consumers were presented with a referendum question regarding their preferences of GM foods and a follow-up
> question concerning their willingness to pay a premium for non-GM foods.
> Bid is included in explanatory variables. I ran logit model and got results including marginal effects.
> How do I get mean WTP?
>
> Many thanks in advance.
>
> Jae
>
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