nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2006‒05‒06
four papers chosen by
Philip Yu
Hong Kong University

  1. Uncovering the macrostructure of tourists’ preferences. A choice experiment analysis of tourism demand to Sardinia By Rinaldo Brau; Davide Cao
  2. Application of the ML Hausman approach to the demand of water for residential use: heterogeneity vs two-error specification By Elisabetta Strazzera
  3. Explorations of the Effect of Experience on Preferences: Two Health-Care Case Studies By Neuman, Shoshana; Neuman, Einat
  4. Poder de Mercado en las Profesiones Autorreguladas: El Desempeño Médico en Argentina By Evelyn Vezza

  1. By: Rinaldo Brau; Davide Cao
    Abstract: This paper studies the preferences of tourists visiting the island of Sardinia (Italy), by means of a choice modelling approach. The focus is on some specific demand-enhancing effects which should confirm the feasibility of implementing sustainable tourism policies. Multinomial logit estimations reveal the strong negative effects resulting from the congestion of tourist attractions and the major transformation of coastal environments. On the other hand, recreational services and the proximity of accommodation to the beaches also seem to be important. The computation of willingness to pay measures and choice probabilities for hypothetical destinations illustrate how this kind of approach can provide useful information in determining decision processes by policy makers and development agencies.
    Keywords: Tourism demand, green preferences, choice experiments, stated preferences
    JEL: Q56 L83 C25
    Date: 2005
  2. By: Elisabetta Strazzera
    Abstract: This paper presents an application of two ML models to the analysis of residential demand of water: the heterogeneity and the two-error model, both apt to model demand in presence of a kinked budget constraint. The heterogeneity model is especially suitable when the distribution is characterized by a strong clustering around the kinks. Since in practice observations can be very close, but not exactly at the kink, its application may require the definition of an interval of data around the kink, so that the observations falling inside this interval are attributed to the kink. We propose a procedure, based upon the estimates obtained from the twoerror model, to define this interval. In this application we find that the heterogeneity model allows to obtain more efficient estimates than the two-error model for the parameter of principal interest, i.e. the coefficient of the price variable.
    Keywords: Water Demand, Block Pricing, Kinked Budget, Constraint, Maximum Likelihood, Discrete-Continuous Choice, Hausman Model
    JEL: C24 C51 D12 Q25
    Date: 2006
  3. By: Neuman, Shoshana; Neuman, Einat
    Abstract: The standard assumption in economic theory is that preferences are stable. In particular, they are not changed as a result of experience with the good/service/event. Behavioral scientists have challenged this assumption and claimed (providing evidence) that preferences are constantly changing when experience is accumulated. This paper tests the effect of experience on preferences for attributes of health-care events. We are using two very different samples and a methodology that facilitates the estimation of marginal utilities of various attributes of a composite non-traded health-care service. Discrete Choice Experimental design is employed for the analysis of samples of (1) women who gave birth, and (2) women who were diagnosed with breast cancer. For each group we had information on experience. In the case of women who gave birth, the sample was decomposed into 3 sub-samples: pregnant women with their first child (no experience); women after one delivery (single experience); and mothers after more than one delivery (multiple experience). Preferences of the 3 sub-groups have then been compared. The breast cancer patients reported the number of chemotherapy/radiation treatments they have already received, thus enabling the construction of an experience variable and testing for the effect of experience on preferences. The basic finding is that preferences for health-care attributes are significantly changed as a result of experience with the health event. However, the amount of experience is irrelevant.
    Keywords: breast cancer; delivery; Discrete Choice Experiment; experience; health-care; preferences
    JEL: D1 D12 I19
    Date: 2006–04
  4. By: Evelyn Vezza
    Abstract: La naturaleza potencialmente anticompetitiva de las prácticas impartidas desde las organizaciones de profesionales ha sido racionalizada por la literatura económica y ha ocupado un lugar no menor en la agenda de los organismos de defensa de la competencia. Sin embargo, la economía empírica carece de estudios sobre el ejercicio profesional autorregulado. Este trabajo relaciona los mercados de servicios profesionales con los modelos de diferenciación vertical y emplea un modelo Logit Mixto para evaluar la conducta del desempeño médico en Argentina. La evidencia hallada sugiere la existencia de algún acuerdo de precios.
    Keywords: profesiones autorreguladas, diferenciación vertical del producto, Logit Mixto, self-regulated professions, vertical product differentiation, Mixed Logit.
    JEL: D43 L1
    Date: 2004–12

This nep-dcm issue is ©2006 by Philip Yu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.