I got another question regarding the interpretation of the covariates of the price coefficient when estimating a model in wtp space. Let's say my utility function looks like this:
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V[['alt1']] = b_Price_value * ( wtp_Att1Lvl2 * Att1Lvl2 + wtp_Att2Lvl2 * Att2Lvl2 + Price )
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b_Price_value = b_Price *
( 1 + (b_TariffSwitched_Price * TariffSwitched) ) *
( Income / Income_Mean ) ^ elast_Price_Income
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b_TariffSwitched_Price = 0.10
elast_Price_Income = -0.15
- For a 10% increase in income, we would observe a 1.5% increase in wtp (on average across all wtp coefficients).
- If a respondent has changed his/her tariff in the past, this lowers his/her wtp by 10% (on average across all wtp coefficients).
What I mean is:
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b_Price * covariates * ( wtp_Att1Lvl2 * Att1Lvl2 + wtp_Att2Lvl2 * Att2Lvl2 + Price )
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b_Price * ( wtp_Att1Lvl2 * Att1Lvl2 * covariates + wtp_Att2Lvl2 * Att2Lvl2 * covariates + Price )
Nico