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From |
Lulu Zeng <[email protected]> |

To |
"[email protected]" <[email protected]> |

Subject |
st: WTP using simulation |

Date |
Thu, 30 Jan 2014 10:12:33 +1100 |

Dear Statalist, This is a subsequent question from my earlier question. I posted this question last night but got an error message from gmail and suspect it may have failed to reach you. But please ignore if you have already seen it. I was trying to work out Willingness to Pay (wtp) from the coefficients of a random utility model. I tried to use the simulation method, which takes draws from 2 coefficients' distribution and divide one by another. As one of the coefficients is associated with a log normally distributed price variable, I had to draw firstly from a normal distribution and -exp it to obtain the log mean and sd. However, my model outputs are in lognormal, so I had to convert the log normally distributed mean and sd to normal before using Stata codes to take the draws. I got help from Alfonso and Roger and managed to obtain the correct draws of the log normal (confirm the mean and sd from my draws equals my original coefficients from the model after all these log to normal conversions). However, my wtp calculated is in the wrong range so I suspect I may have made some mistakes. All I did was drawing from the 2 distributions (1 log the other one normal), put the in 2 columns, and work out the ratio (attribute divide price). I am not sure if I need to take random numbers from each distribution and do the division? If so, it would be really appreciated if you could advise on the Stata code to achieve this? Also, regarding converting log normal to normal, I used the wiki linked from Alfonso and it worked (above cross check). But I read about other way of doing it but gives totally different results. For example, equation 6 on page 3 of (this looks to me more like the formula for converting normal to log normal, which is the other way round....): http://www.econstor.eu/bitstream/10419/76151/1/613583167.pdf In addition, a paper by Kennth Train below shows converting log normal to normal (table 1.1 & table 1.2 on page 8 and 9 respectively) using this method I was questioning about above too. I replicate the figures in table 1.2 using the method based on data from table 1.1. http://elsa.berkeley.edu/~train/trainweeks.pdf It would be really appreciated if I could have your help on this. Best Regards, Lulu * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

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