Design efficiency for non-market valuation with choice modelling: how to measure it, what to report and why

Publisher:
Wiley
Publication Type:
Journal Article
Citation:
Australian Journal of Agricultural and Resource Economics, 2008, 52 pp. 253 - 282
Issue Date:
2008-01
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We review the basic principles for the evaluation of design efficiency in discrete choice modelling with a focus on efficiency of WTP estimates from the multinomial logit model. The discussion is developed under the realistic assumption that researchers can plausibly define a prior belief on the range of values for the utility coefficients. D-, A-, B-, S- and C-errors are compared as measures of design performance in applied studies and their rationale is discussed. An empirical example based on the generation and comparison of fifteen separate designs from a common set of assumptions illustrates the relevant considerations to the context of non-market valuation, with particular emphasis placed on C-efficiency. Conclusions are drawn for the practice of reporting in non-market valuation and for future work on design research.
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