[Limdep Nlogit List] estimating wtp with a cost-income ratio in the utility function

[John C. Whitehead]

Or uniform, or normal ... any distribution on cost that is constrained
positive might be an improvement over a fixed cost coefficient or the log
functional form.

On Mon, Oct 7, 2024 at 12:18 PM Arthur Caplan via Limdep <
limdep at mailman.sydney.edu.au> wrote:

> Dear Medard,
>
> Have you thought about assigning a constrained triangular distribution to
> the cost coefficient?
>
> Arthur Caplan
>
> -----Original Message-----
> From: Limdep <limdep-bounces at mailman.sydney.edu.au> On Behalf Of medard
> kakuru via Limdep
> Sent: Monday, October 7, 2024 6:26 AM
> To: Limdep and Nlogit Mailing List <limdep at mailman.sydney.edu.au>
> Cc: medard kakuru <medakseth at gmail.com>
> Subject: Re: [Limdep Nlogit List] estimating wtp with a cost-income ratio
> in the utility function
>
> Dear John,
> Yes, my first model is to make the cost coefficient fixed and a normal
> distribution for other non-cost attributes. When I introduce a cost-income
> ratio, I give the cost coefficient a log normal. Yes, the fixed cost
> coefficient will not cause an explosion but it is being criticized for
> assuming that individuals are cost insensitive. So I try to avoid it, I
> make the cost coefficient log normal, which now causes an explosion.
>
> On Mon, Oct 7, 2024 at 2:55 PM John C. Whitehead via Limdep <
> limdep at mailman.sydney.edu.au> wrote:
>
> > Medard,
> >
> > Did you make the cost coefficient fixed (no estimated standard
> > deviation) or log normal. It is my understanding that the latter will
> > blow up your wtp estimate. In my experience a fixed cost coefficient
> > will cause no such damage.
> >
> > John Whitehead
> >
> > On Mon, Oct 7, 2024 at 7:48 AM medard kakuru via Limdep <
> > limdep at mailman.sydney.edu.au> wrote:
> >
> > > Dear All,
> > > I am estimating mixed logit models in preference and utility spaces.
> > > My
> > wtp
> > > estimates are big as expected (because I made the cost parameter
> > > fixed - according to Giergizny et al., 2012). To remedy the wtp
> > > explosion, I include the cost-income ratio in the utility function,
> > > necessitating an adjustment in the usual formula of computing wtp.
> > > Please assist me with
> > the
> > > adjusted syntax that takes account of the ratio.
> > > Thank you.
> > >
> > > Regards,
> > >
> > > Medard
> > > PhD Student,
> > > Makerere University Kampala
> > >
> > > On Thu, Oct 3, 2024 at 10:34 PM Steven Lavrenz via Limdep <
> > > limdep at mailman.sydney.edu.au> wrote:
> > >
> > > > Are these quantities referring to the same statistic? If so, why
> > > > the difference in naming convention within Limdep?
> > > >
> > > > Best Regards,
> > > > Steve
> > > >
> > > > --
> > > > Steven M. Lavrenz, PhD, RSP2I
> > > > Assistant Professor
> > > > Wayne State University
> > > > Civil and Environmental Engineering
> > > > 5050 Anthony Wayne Drive
> > > > Detroit, MI 48202
> > > > (313) 577-2086
> > > > slavrenz at wayne.edu<mailto:slavrenz at wayne.edu>
> > > >
> > > >
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