RT Journal Article
SR Electronic
T1 Accounting for Spatial Heterogeneity and Autocorrelation in Spatial Discrete Choice Models: Implications for Behavioral Predictions
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 382
OP 402
DO 10.3368/le.87.3.382
VO 87
IS 3
A1 Kurt E. Schnier
A1 Ronald G. Felthoven
YR 2011
UL http://le.uwpress.org/content/87/3/382.abstract
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)