Abstract
Roger H. von Haefen (2001) "Incorporating Observed Choice into
the Construction of Welfare Measures from Random Utility Models."
This paper develops an approach to welfare measurement from random utility models that
incorporates the implications of an individual's observed choice. The economic and
statistical properties of the proposed approach are discussed, and its empirical
implications are illustrated with an application to outdoor recreation demand. Welfare
estimates for two policy scenarios and four alternative repeated discrete choice
specifications — a conditional logit, a quasi-nested logit, a random marginal utility
of income logit, and a full random coefficients logit — are constructed for a
subsample of the 1994 National Survey of Recreation and the Environment.
Last Modified Date: July 19, 2008
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