PT  - JOURNAL ARTICLE
AU  - Schnier, Kurt E.
AU  - Felthoven, Ronald G.
TI  - Accounting for Spatial Heterogeneity and Autocorrelation in Spatial Discrete Choice Models: Implications for Behavioral Predictions
AID  - 10.3368/le.87.3.382
DP  - 2011 Aug 01
TA  - Land Economics
PG  - 382--402
VI  - 87
IP  - 3
4099  - http://le.uwpress.org/content/87/3/382.short
4100  - http://le.uwpress.org/content/87/3/382.full
SO  - Land Econ2011 Aug 01; 87
AB  - The random utility model (RUM) is commonly used in the land-use and fishery economics literature. This research investigates the affect that spatial heterogeneity and spatial autocorrelation have within the RUM framework using alternative specifications of the multinomial logit, multinomial probit, and spatial multinomial probit models. Using data on the spatial decisions of fishermen, the results illustrate that ignoring spatial heterogeneity in the unobservable portion of the RUM dramatically affects model performance and welfare estimates. Furthermore, accounting for spatial autocorrelation in addition to spatial heterogeneity increases the performance of the RUM. (JEL C35, Q22)