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Investigating Linkages Among Individual Decision Rules, Properties of Experimental Designs and Choice Models In Environmental Economics Applications

Funding: 2007: $70,000
2008: $106,000
2009: $110,000

Project Member(s): Street, D., Wang, P.

Funding or Partner Organisation: Australian Research Council (ARC Discovery Projects)

Start year: 2007

Summary: Experimental designs frequently are used in environmental economics to construct so-called stated preference studies of environmental goods. Almost all designs used by economists allow the researcher to estimate only strictly additive indirect utility functions (no interactions). Model estimates derived from data associated with these designs will be biased if the assumption about the form of the indirect utility is incorrect. We will study the consequences for model estimates of choices that arise from various decision rules that can be expressed as multi-linear indirect utility functions using both Monte Carlo simulations and empirical tests

Keywords: Stated preference choice experiments, Orthogonal Main Effects Plans, Environmental economics, Monte Carlo simulation, Discrete choice models,

FOR Codes: Environment and Resource Economics, Econometric and Statistical Methods, Agricultural Economics, Environmental and resource evaluation not elsewhere classified, Economic issues not elsewhere classified, Technological and organisational innovation, Environmental Management Systems, Carbon and Emissions Trading