2022/11/29 by Luisa Scaccia, Edoardo Marcucci, Valerio Gatta
Business, Management and Accounting · Economics, Econometrics and Finance · #Consumer Market Behavior and Pricing #Economic and Environmental Valuation #Housing Market and Economics
paper · doi:10.1016/j.trb.2022.11.007
openalex publication_date 2022/11/29 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Heterogeneity in agents’ preferences is generally analysed through mixed logit models, which assume taste parameters are distributed in the population according to a certain mixing distribution. As a result, if the utility function is linear in attributes, the willingness to pay is the ratio of two random parameters and is itself random. This paper proposes a technique built on the Delta method, partly analytical and partly based on simulations, to obtain the sampling distribution of the willingness to pay, accounting for both heterogeneity and sampling error. The paper contributes to the literature by: (i) redressing some imprecisions in Bliemer and Rose (2013) that produce biased results; (ii) proposing a faster estimation process, compared to the Krinsky and Robb (1986, 1990) method that, relying on simulation only, proves computationally more demanding; (iii) comparing the performance of different methods using both synthetic and real data sets. The paper shows, via a Monte Carlo study, that the method we develop and the Krinsky and Robb one produce similar results, while outperforming that proposed by Bliemer and Rose.