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

Tue Oct 8 07:41:50 AEDT 2024

Dear Medard,

I recommend that you choose a parameter distribution based on theory and empirical properties for your intended application, not whether you perceive a distribution to be commonly used in a particular area of the literature.

Best,

Robert J. Johnston
Director, George Perkins Marsh Institute
Professor, Department of Economics
Chair, Clark University Institutional Review Board (IRB)
Editor, Resource and Energy Economics
Clark University
950 Main St.
Worcester, MA 01610
Phone: (508) 751-4619
Email: rjohnston at clarku.edu
Institute website: https://url.au.m.mimecastprotect.com/s/Lny0Cvl1rKiOYJw8LfQfLFQwLyd?domain=clarku.edu
IRB website: https://url.au.m.mimecastprotect.com/s/vcAJCwV1vMf0q5lxVsqhgFJMLbZ?domain=clarku.edu
Google Scholar Citations: https://url.au.m.mimecastprotect.com/s/gRlVCxngwOfm7pEvRHYi4FyVf10?domain=scholar.google.com

-----Original Message-----
From: Limdep <limdep-bounces at mailman.sydney.edu.au> On Behalf Of medard kakuru via Limdep
Sent: Monday, October 7, 2024 4:20 PM
To: Limdep and Nlogit Mailing List <limdep at mailman.sydney.edu.au>
Cc: medard kakuru <medakseth at gmail.com>
Subject: [EXT] Re: [Limdep Nlogit List] estimating wtp with a cost-income ratio in the utility function

Dear John,
I will try both, though prefer a log normal which is commonly used.
Thank you.

Medard

On Mon, Oct 7, 2024 at 7:53 PM John C. Whitehead via Limdep < limdep at mailman.sydney.edu.au> wrote:

> 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>
> > > > >
> > > > >
> > > > > _______________________________________________
> > > > > Limdep site list
> > > > > Limdep at mailman.sydney.edu.au
> > > > > https://url.au.m.mimecastprotect.com/s/KbesCyojxQT68GOo2HRspFxn0pB?domain=nam10.safelinks.protection.outlook.com
> > > > > %2Flimdep.itls.usyd.edu.au%2F&data=05%7C02%7Crjohnston%40clark
> > > > > u.edu%7C59f070913dac45bde1dc08dce70d918a%7Cb5b2263d68aa453eb97
> > > > > 2aa1421410f80%7C0%7C0%7C638639292697640077%7CUnknown%7CTWFpbGZ
> > > > > sb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXV
> > > > > CI6Mn0%3D%7C0%7C%7C%7C&sdata=cfQAYpmnGu9iB%2BIxwY8IafgTJntSp91
> > > > > Fu4VSOHrWBno%3D&reserved=0
> > > > >
> > > > >
> > > > _______________________________________________
> > > > Limdep site list
> > > > Limdep at mailman.sydney.edu.au
> > > > https://url.au.m.mimecastprotect.com/s/oYsLCzvkyVC8kXWqwsotvF9hCTW?domain=nam10.safelinks.protection.outlook.com
> > > > Flimdep.itls.usyd.edu.au%2F&data=05%7C02%7Crjohnston%40clarku.ed
> > > > u%7C59f070913dac45bde1dc08dce70d918a%7Cb5b2263d68aa453eb972aa142
> > > > 1410f80%7C0%7C0%7C638639292697661810%7CUnknown%7CTWFpbGZsb3d8eyJ
> > > > WIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%
> > > > 7C0%7C%7C%7C&sdata=ahAxDVoyWN09mK%2BWNd5bjGWwQEI%2Fso6GW%2BPrSJC
> > > > 6DDU%3D&reserved=0
> > > >
> > > _______________________________________________
> > > Limdep site list
> > > Limdep at mailman.sydney.edu.au
> > > http://l/
> > > imdep.itls.usyd.edu.au%2F&data=05%7C02%7Crjohnston%40clarku.edu%7C
> > > 59f070913dac45bde1dc08dce70d918a%7Cb5b2263d68aa453eb972aa1421410f8
> > > 0%7C0%7C0%7C638639292697678009%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4
> > > wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%
> > > 7C&sdata=hTgeqv1sFQEcFv0ymsLwVnHxXvpgvtjpNdzLb8NUjqo%3D&reserved=0
> > >
> > _______________________________________________
> > Limdep site list
> > Limdep at mailman.sydney.edu.au
> > http://lim/
> > dep.itls.usyd.edu.au%2F&data=05%7C02%7Crjohnston%40clarku.edu%7C59f0
> > 70913dac45bde1dc08dce70d918a%7Cb5b2263d68aa453eb972aa1421410f80%7C0%
> > 7C0%7C638639292697693757%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDA
> > iLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=K
> > 5S%2BWeOs3I840Ty94iE0vwXqafyNt1aBtKep07jS3pE%3D&reserved=0
> > _______________________________________________
> > Limdep site list
> > Limdep at mailman.sydney.edu.au
> > http://lim/
> > dep.itls.usyd.edu.au%2F&data=05%7C02%7Crjohnston%40clarku.edu%7C59f0
> > 70913dac45bde1dc08dce70d918a%7Cb5b2263d68aa453eb972aa1421410f80%7C0%
> > 7C0%7C638639292697709445%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDA
> > iLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=F
> > caBDkaV3AK8kEGMrAVFlrS0mEuAl4cmlT7XY0ysL8k%3D&reserved=0
> >
> _______________________________________________
> Limdep site list
> Limdep at mailman.sydney.edu.au
> http://limde/
> p.itls.usyd.edu.au%2F&data=05%7C02%7Crjohnston%40clarku.edu%7C59f07091
> 3dac45bde1dc08dce70d918a%7Cb5b2263d68aa453eb972aa1421410f80%7C0%7C0%7C
> 638639292697724690%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjo
> iV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=qo2EnDz7%2F
> LQZIsuQhcuJe7tlC8AoDVMYjFfTMgJe7Zo%3D&reserved=0
>
_______________________________________________
Limdep site list
Limdep at mailman.sydney.edu.au
http://limdep.itls.usyd.edu.au/