nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2008‒11‒25
ten papers chosen by
Philip Yu
Hong Kong University

  1. Heteroskedasticity, extremity, and moderation in heterogeneous choice models By Garrett Glasgow
  2. Modelling the Incidence of Self-Employment: Individual and Employment Type Heterogeneity. By Sarah Brown; Lisa Farrell; Mark N Harris
  5. An Application of Conjoint Analysis in Agricultural Sustainability Assessment By Sydorovych, O.; Wossink, A.
  6. What are the preferences of Dairy Farmers regarding their Work? A Discrete Choice Experiment in the Eastern Part of Switzerland By Lips, Markus; Gazzarin, Christian
  7. Determinants of farm diversification and interaction with the CAP. An application to FADN of Marche region (Italy) By Finocchio, Romina; Esposti, Roberto
  8. Consumer Willingness to Pay for Swiss Chicken Meat: An In-store Survey to Link Stated and Revealed Buying Behaviour By Bolliger, C.; Reviron, S.
  9. Eliciting public preferences for managing the public rights of way. By Morris, J.; Colombo, S.; Angus, A.; Stacey, K.; Parsons, D.; Brawn, M.; Hanley, N.
  10. General solutions for choice sets: The Generalized Optimal-Choice Axiom set By Andrikopoulos, Athanasios; Zacharias, Eleftherios

  1. By: Garrett Glasgow (University of California, Santa Barbara)
    Abstract: Heterogeneous choice models are extensions of binary and ordinal regression models that explicitly model the determinants of heteroskedasticity. I show that in many cases moderation (proximity to a choice threshold) will produce empirical results identical to heteroskedasticity in binary heterogeneous choice models, while extremity (a preference for endpoint categories) will produce empirical results identical to heteroskedasticity in ordinal heterogeneous choice models. I show how a simple extension of Williams' user-written oglm command (2006) can create heterogenous ordered choice models that can distinguish between heteroskedasticity, extremity, and moderation.
    Date: 2008–11–16
  2. By: Sarah Brown; Lisa Farrell; Mark N Harris (Department of Economics, The University of Sheffield)
    Abstract: Modelling the incidence of self-employment has traditionally proved problematic. Whilst the individual supply side characteristics of the self-employed are well documented, we argue that the literature has largely neglected demand-side aspects. We explore the determinants of self-employment using individual level data drawn from the U.S. Survey of Consumer Finances (SCF). We present results from an econometric framework, the Parameterised Dogit model, that allows us to separately, and simultaneously, model individual heterogeneity (i.e. supply side) and employment type heterogeneity (i.e. demand-side) influences that determine self-employment. Our findings suggest that whilst individual characteristics are important determinants of self-employment, there are also factors which are specific to the type of employment that influence whether an individual is self-employed.
    Keywords: Discrete Choice Models, Dogit Models, Self-Employment.
    JEL: J23 J33 C25 C10
    Date: 2008–09
  3. By: Gardebroek, Cornelis; Oude Lansink, Alfons G.J.M.
    Abstract: Micro-econometric models have become a standard and powerful tool in analysing agricultural policies. In this paper we assess the contributions that have been made in the agricultural economics literature to dynamic microeconometric models of firms and households that are estimated using microdata. After discussing developments in dynamic investment models, dynamic household models, dynamic discrete choice models and dynamic efficiency models we give promising directions for future research and discuss implications for future data collection.
    Keywords: Dynamics, microeconometric models, agricultural policy analysis, Agricultural and Food Policy, Research Methods/ Statistical Methods,
    Date: 2008
  4. By: Fezzi, Carlo; Bateman, Ian J.; Day, Brett; Posen, Paulette; Rigby, Dan
    Abstract: We develop a two-stage, multinomial logit model of UK land use to investigate the impact of policy changes upon agriculture. The model utilises a large panel database covering the entirety of England and Wales for 14 years between 1969 and 2004 integrated with the economic and physical environment determinants of all major agricultural land use types. Our model performs well in out-ofsample prediction of current land use and we use it to assess a proposed implementation of the Water Framework Directive via a tax on fertilizer. Results indicate that such policy change would generate substantial switching from arable to grassland systems, reducing significantly the amount of nitrate leaching into UK water-bodies.
    Keywords: Water Framework Directive, Land use models, Discrete choice models, Multinomial logit, Agricultural and Food Policy, Land Economics/Use, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,
    Date: 2008
  5. By: Sydorovych, O.; Wossink, A.
    Abstract: Increasing public interest in the concept of sustainable agriculture has resulted in the development of a number of methods that could be used for the assessment of sustainability of various agricultural production systems. Because of its complex, multi-dimensional nature, sustainability is most often assessed using numerous indicators, which make aggregate comparisons among systems difficult. In this paper we propose a methodology that could be beneficial in aggregate sustainability assessment. We apply conjoint analysis to identify economic, social, and ecological attributes that are perceived as important for agricultural sustainability by different stakeholders and to assess their relative impact on the overall sustainability measure.
    Keywords: Conjoint analysis, choice experiments, sustainability assessment, Environmental Economics and Policy,
    Date: 2008
  6. By: Lips, Markus; Gazzarin, Christian
    Abstract: The paper analyzes the preferences of dairy farmers with respect to their work by the means of a Discrete Choice experiment, which was carried out in the Eastern part of Switzerland. 304 dairy farmers, who intend to produce milk beyond the abolishment of the milk quota in 2009, were asked to choose between the status quo and alternatives consisting of several combinations with four attributes. The latter comprise work content, terms of employment, holiday per year and income per year. Using a probit model, the willingness to pay/accept is calculated. The results indicate that there is a strong preference to stay in dairy production. In order to achieve both, maintaining the level of utility and moving away from dairy production, an additional income (willingness to accept) per year of at least CHF 25€ٰ00.- would be necessary. The pre-ferences of dairy farmers show that differences between the alternative work contents like suckler cows husbandry, farming without livestock and work outside of agriculture are minor.
    Keywords: discrete choice, preferences, work content, dairy farming, Labor and Human Capital, Land Economics/Use,
    Date: 2008
  7. By: Finocchio, Romina; Esposti, Roberto
    Abstract: This work analyzes farm diversification activities in an Italian region (Marche). The study examines 387 farms from Farm Accountancy Data Network (FADN) over a six-year period (2000-2005), applying Discrete Choice Models to identify their business. Recognizing the driving forces of such diversification strategy can be useful to better design those agricultural policies explicitly aimed at promoting agricultural multifunctionality as well as social and environmental sustainability. The linkage between diversification choices and CAP payments is thus also investigated.
    Keywords: Farm diversification, Discrete Choice Models, Multifunctionality, Agricultural and Food Policy, Farm Management,
    Date: 2008
  8. By: Bolliger, C.; Reviron, S.
    Abstract: In a global economy food origin is gaining increasing attention as determining purchase criterion in food consumption. Consequently, for many consumers a product€ٳ country-of-origin (COO) is an important cue in evaluating both domestic and foreign products. A double-bounded dichotomous choice approach in an in-store setting was used to assess consumers€٠preference and willingness-to-pay (WTP) for the product attribute €ܓwiss origin€ݠrelative to €܅uropean origin€ݠfor chicken meat. Data collection took place in the poultry section of six grocery stores in Francophone Switzerland. Sample selection was based on the consumer€ٳ purchase decision, that is only actual chicken buyers were questioned. During the survey product data of participants€٠actual purchase were recorded. Thus, both hypothetical stated and revealed consumer behaviour data were collected. Based on 450 records we highlight four different consumer segments, notably €܌oyal Swiss€ݬ €܌ow Price Swiss Zappers€ݬ €Ürice Orientated€ݬ and €ޔhe Gourmets€ݮ At an equal price, 90% of the entire sample prefers Swiss chicken meat. To elicit mean WTP for €ܓwiss origin€ݠ we used logit analysis. The results indicate that mean WTP differs significantly between the highlighted consumer segments. €܌oyal Swiss€ݠ€Ӡmedium to high priced Swiss chicken meat consumers €Ӡare willing to pay a premium of about 7.40 Euros per kilo chicken breast of Swiss origin. This premium corresponds with actual price differences of at most 7.50 ‚̯kg for Swiss chicken breast relative to European found in the researched grocery stores. €܌ow Price Swiss Zappers€ݠare willing to pay a premium of 2.10 ‚̯kg chicken breast of Swiss origin. In contrast, the €Ürice Orientated€ݠand €ޔhe Gourmets€ݠare not willing to pay any premium for Swiss origin. This corresponds with their revealed purchase behaviour as they bought imported European chicken. Considering mean WTP for the entire sample of 3.00 ‚̯kg for Swiss origin, we conclude that this is not a good predictor for specific consumer segments. It over-, or underestimates mean WTP of the highlighted consumer segments. Using both stated and revealed consumer behaviour data, we are able to calculate consumer group specific mean WTP which leads to more appropriate results for agribusiness and marketing purposes.
    Keywords: contingent valuation method, country-oforigin, willingness-to-pay, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety,
    Date: 2008
  9. By: Morris, J.; Colombo, S.; Angus, A.; Stacey, K.; Parsons, D.; Brawn, M.; Hanley, N.
    Abstract: Public Rights of Way (PROW) in England and Wales, provides a wide range of social and economic benefits to those other than owners of land. The protection and extension of PROW are an important way of encouraging people to engage in informal enjoyment of urban and rural areas, with beneficial consequences for health and welfare. In urban areas they provide networks of mobility and interaction for people at the community level, helping to reduce reliance on motorised transport. In the rural context they define access to the countryside, critically linked to recreation and tourism, as well as providing mobility networks for local residents. This study describes the use of a Choice Experiment (CE) to derive monetary estimates the social benefits of PROW in an English county.
    Keywords: Choice Experiments, Public Rights of Way, Willingness to Pay, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2008
  10. By: Andrikopoulos, Athanasios; Zacharias, Eleftherios
    Abstract: In this paper we characterize the existence of best choices of arbitrary binary relations over non finite sets of alternatives, according to the Generalized Optimal-Choice Axiom condition introduced by Schwartz. We focus not just in the best choices of a single set X, but rather in the best choices of all the members of a family K of subsets of X. Finally we generalize earlier known results concerning the existence (or the characterization) of maximal elements of binary relations on compact subsets of a given space of alternatives.
    Keywords: Generalized Optimal-Choice Axiom; maximal elements; acyclicity; consistency; ≻-upper compactness.
    JEL: D11
    Date: 2008

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