Heterogeneity in the WTP for recreational access: distributional aspects

Citation

Campbell D, Vedel SE, Thorsen BJ & Jacobsen JB (2014) Heterogeneity in the WTP for recreational access: distributional aspects. Journal of Environmental Planning and Management, 57 (8), pp. 1200-1219. https://doi.org/10.1080/09640568.2013.793173

Abstract
In this study we have addressed appropriate modelling of heterogeneity in willingness to pay (WTP) for environmental goods, and have demonstrated its importance using a case of forest access in Denmark. We compared WTP distributions for four models: (1) a multinomial logit model, (2) a mixed logit model assuming a univariate Normal distribution, (3) or assuming a multivariate Normal distribution allowing for correlation across attributes, and (4) a mixture of two truncated Normal distributions, allowing for correlation among attributes. In the first two models mean WTP for enhanced access was negative. However, models accounting for preference heterogeneity found a positive mean WTP, but a large sub-group with negative WTP. Accounting for preference heterogeneity can alter overall conclusions, which highlights the importance of this for policy recommendations.

Keywords
forests access; Denmark; random parameters logit; mixture of truncated normal distributions

Journal
Journal of Environmental Planning and Management: Volume 57, Issue 8

People

Professor Danny Campbell

Professor, Economics