Calculating the exact compensating variation in logit and nested-logit models with income effects: theory, intuition, implementation, and application ?
نویسندگان
چکیده
An exact formula for the expected compensating variation is derived for logit and nested-logit models with income effects. Intuition, examples, and an application are provided. The appendix contains a formal proof. The formula is applied to estimate the E[cv]s salmon anglers in Maine would associate with changes in catch rates at Maine and Canadian Rivers.
منابع مشابه
A Simple Method of Incorporating Income Effects into Logit and Nested - Logit Models : Theory and Application
Substantive income effects are incorporated in a logit or nested-logit model by assuming that utility is a piece-wise linear spline function of residual income. Specific income data are not required, only income by category. Expected compensating variation is easily and accurately approximated by the difference between expected maximum utility in the proposed and initial state, multiplied by th...
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