nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2006‒10‒14
five papers chosen by
Philip Yu
Hong Kong University

  1. Combining revealed and stated preference methods to assess the private value of agrobiodiversity in Hungarian home gardens: By Birol, Ekin; Kontoleon, Andreas; Smale, Melinda
  2. Understanding Instrumental Variables in Models with Essential Heterogeneity By James J. Heckman; Sergio Urzua; Edward J. Vytlacil
  3. Influence of Advertising Variability, Brand Extension Effects, Brand Name, Variety Seeking Behavior and Customer Value on Buying Decisions: A Multi-experiment Analysis By Rajagopal
  4. Consumer Response to Seasonal Clearance Sales: Experimental Analysis of Consumer Personality Traits in Self Service Stores By Rajagopal
  5. Differences in Job Dissatisfaction Across Europe By Cheti Nicoletti

  1. By: Birol, Ekin; Kontoleon, Andreas; Smale, Melinda
    Abstract: " Hungarian home gardens are small-scale farms managed by farm households using traditional management practices and family labor. They generate private benefits for farmers by enhancing diet quality and providing food when costs of transacting in local markets are high. Home gardens also generate public benefits for society by supporting long-term productivity advances in agriculture. In this paper, we estimate the private value to farmers of agrobiodiversity in home gardens. Building on the approach presented in EPTD Discussion Paper 117 (2004), we combine a stated preference approach (a choice experiment model) and a revealed preference approach (a discrete-choice, farm household model). Both models are based on random utility theory. To combine the models, primary data were collected from the same 239 farm households in three regions of Hungary. Combining approaches leads to a more efficient and robust estimation of the private value of agrobiodiversity in home gardens. Findings can be used to identify those farming communities, which would benefit most from agri-environmental schemes that support agrobiodiversity maintenance, at least public cost." Authors' abstract
    Keywords: Home gardens, Small-scale farmers, Diet quality, Agricultural productivity, Agrobiodiversity, Household surveys, Private value, Choice experiment model, Farm household model, Revealed and stated preference methods,
    Date: 2006
  2. By: James J. Heckman; Sergio Urzua; Edward J. Vytlacil
    Abstract: This paper examines the properties of instrumental variables (IV) applied to models with essential heterogeneity, that is, models where responses to interventions are heterogeneous and agents adopt treatments (participate in programs) with at least partial knowledge of their idiosyncratic response. We analyze two-outcome and multiple-outcome models including ordered and unordered choice models. We allow for transition-specific and general instruments. We generalize previous analyses by developing weights for treatment effects for general instruments. We develop a simple test for the presence of essential heterogeneity. We note the asymmetry of the model of essential heterogeneity: outcomes of choices are heterogeneous in a general way; choices are not. When both choices and outcomes are permitted to be symmetrically heterogeneous, the method of IV breaks down for estimating treatment parameters.
    JEL: C31
    Date: 2006–10
  3. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: The belief that individual difference in brand preference or choice behavior are caused by personality differences has not always been supported by empirical research. The experiment on the variety seeking behavior of consumers, discussed in this paper argues that although consumers are seeking novelty and unexpectedness in a brand that they have not bought before, their purchase will be selective, in reference to the empirical investigation. The perceptions on brand name in reference to brand risk and brand differences have been the prime factors in making buying decision for new brands among the consumers. Consumers also ascertain the brand name associated with the unfamiliar brands as they feel high risk averse and entangle in decision making with perceived brand differences. The paper discusses the influence of advertising, brand name, variety seeking behavior and customer value towards making buying decisions. The study has been divided into four experiments carried out in reference to retail business environment in Mexico.
    Keywords: Advertising, media communication, brand extension, customer value, cognitive behavior, decision making
    JEL: D11 M31 M37
    Date: 2006–08
  4. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: Consumer responses to clearance sales, both in terms of consumer satisfaction with the decision process and in terms of subsequent store choice behavior, are explored in the paper through four controlled experiments conducted involving clearance sales in a consumer choice and decision satisfaction context. The results suggest that consumer response to clearance sales is driven to a large extent by two factors: the effect of a clearance sale on the available options of goods and the degree of store loyalty. Response to a clearance sale was found to be a function of two primary forces-the degree to which a consumer was personally committed to the discount sales alternative, and changes in the difficulty of making a decision due to limitation of buying options. Overall, the discussion of results of the four studies presented in the paper demonstrates that consumer response to clearance sales, both in terms of decision satisfaction levels and observed store-loyalty behavior, are strongly influenced by the variables of price sensitivity, attractiveness of products, store-loyalty and perceived value on available brands.
    Keywords: Customer value, product attractiveness, advertising, sales motivation, retailing, brand value
    JEL: C12 C91 D11 M30
    Date: 2006–08
  5. By: Cheti Nicoletti (Institute for Social and Economic Research)
    Abstract: The aim of this paper is to analyze the determinants of job dissatisfaction in a European cross-country comparison perspective. In particular we would like to understand if differences in the reported job dissatisfaction between European countries reflect a rescaling of the dissatisfaction measures or, also, a different impact of the job dissatisfaction determinants. To this aim we estimate dissatisfaction models separately by country using fixed effects logit models. We test the equality of the model coefficients across countries by extending the test proposed by Allison (1999) for simple logit and probit models.
    Date: 2006–08

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.