Calculating the Exact Compensating Variation in Logit and Nested-Logit Models with Income Effects: Theory, Intuition, Implementation, and Application

Unpublished

Anders Karlstrom, Edward R. Morey
2004

Cite

APA Click to copy
Karlstrom, A., & Morey, E. R. (2004). Calculating the Exact Compensating Variation in Logit and Nested-Logit Models with Income Effects: Theory, Intuition, Implementation, and Application.

Chicago/Turabian Click to copy
Karlstrom, Anders, and Edward R. Morey. “Calculating the Exact Compensating Variation in Logit and Nested-Logit Models with Income Effects: Theory, Intuition, Implementation, and Application,” 2004.

MLA Click to copy
Karlstrom, Anders, and Edward R. Morey. Calculating the Exact Compensating Variation in Logit and Nested-Logit Models with Income Effects: Theory, Intuition, Implementation, and Application. 2004.

BibTeX Click to copy

@unpublished{anders2004a,
  title = {Calculating the Exact Compensating Variation in Logit and Nested-Logit Models with Income Effects: Theory, Intuition, Implementation, and Application},
  year = {2004},
  author = {Karlstrom, Anders and Morey, Edward R.}
}

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Abstract

An exact formula for the expected compensating variation is derived for logit and nested-logit models with income effects. Intuition, examples, and an application are provided. The appendix contains a formal proof. The formula is applied to estimate the E[cv]s salmon anglers in Maine would associate with changes in catch rates at Maine and Canadian Rivers.