The MIT PressJournals
Article navigation
Publication Cover

Follow

More About The Review


Article Metrics

Altmetric

About article usage data:

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aenean euismod bibendum laoreet. Proin gravida dolor sit amet lacus accumsan et viverra justo commodo. Proin sodales pulvinar tempor. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus.


Follow

Follow

Nonlinear Income Effects in Random Utility Models

Joseph A. Herriges and Catherine L. Kling

Posted Online March 13, 2006
https://doi.org/10.1162/003465399767923827

Review of Economics and Statistics

Volume 81 | Issue 1 | February 1999
p.62-72
Download Options

Nonlinear Income Effects in Random Utility Models

Joseph A. Herriges and Catherine L. Kling
https://doi.org/10.1162/003465399767923827
Received: October 16, 1996
Accepted: December 12, 1997
Published Online: March 13, 2006
Abstract

Random utility models (RUMs) are used in the literature to model consumer choices from among a discrete set of alternatives, and they typically impose a constant marginal utility of income on individual preferences. This assumption is driven partially by the difficulty of constructing welfare estimates in models with nonlinear income effects. Recently, McFadden (1995) developed an algorithm for computing these welfare impacts using a Monte Carlo Markov chain simulator for generalized extreme-value variates. This paper investigates the empirical consequences of nonlinear RUMs in the case of sportfishing modal choice, while refining and contrasting the available methods for welfare estimation.

Joseph A. Herriges
Iowa State University
Catherine L. Kling
Iowa State University
https://doi.org/10.1162/003465399767923827
Abstract

Random utility models (RUMs) are used in the literature to model consumer choices from among a discrete set of alternatives, and they typically impose a constant marginal utility of income on individual preferences. This assumption is driven partially by the difficulty of constructing welfare estimates in models with nonlinear income effects. Recently, McFadden (1995) developed an algorithm for computing these welfare impacts using a Monte Carlo Markov chain simulator for generalized extreme-value variates. This paper investigates the empirical consequences of nonlinear RUMs in the case of sportfishing modal choice, while refining and contrasting the available methods for welfare estimation.

Joseph A. Herriges
Iowa State University
Catherine L. Kling
Iowa State University
Download Options

Nonlinear Income Effects in Random Utility Models

Joseph A. Herriges and Catherine L. Kling
https://doi.org/10.1162/003465399767923827
Received: October 16, 1996
Accepted: December 12, 1997
Published Online: March 13, 2006
Abstract

Random utility models (RUMs) are used in the literature to model consumer choices from among a discrete set of alternatives, and they typically impose a constant marginal utility of income on individual preferences. This assumption is driven partially by the difficulty of constructing welfare estimates in models with nonlinear income effects. Recently, McFadden (1995) developed an algorithm for computing these welfare impacts using a Monte Carlo Markov chain simulator for generalized extreme-value variates. This paper investigates the empirical consequences of nonlinear RUMs in the case of sportfishing modal choice, while refining and contrasting the available methods for welfare estimation.

Joseph A. Herriges
Iowa State University
Catherine L. Kling
Iowa State University
Favorite
Track Citations
Download Citation
RSS TOC
RSS Citation