nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2009‒05‒02
seven papers chosen by
Philip Yu
Hong Kong University

  1. Dynamic perceptual mapping By Michael Greenacre
  2. The Random Coefficients Logit Model Is Identified By Patrick Bajari; Jeremy Fox; Kyoo il Kim; Stephen P. Ryan
  4. Revealed Preferences, Choices, and Psychological Indexes By Ivan Soraperra
  5. Estimating Fully Observed Recursive Mixed-Process Models with cmp By David Roodman
  6. Product Differentiation and Market Segmentation in Applesauce: Usnig a Choice Experiment to Assess the Value of Organic, Local and Nutrition Attributes By James, Jennifer S.; Rickard, Bradley J.; Rossman, William J.
  7. Consumer Preferences for U.S. Pork in Urban China By Ortega, David L.; Wang, H. Holly; Wu, Laping

  1. By: Michael Greenacre
    Abstract: Perceptual maps have been used for decades by market researchers to illuminate them about the similarity between brands in terms of a set of attributes, to position consumers relative to brands in terms of their preferences, or to study how demographic and psychometric variables relate to consumer choice. Invariably these maps are two-dimensional and static. As we enter the era of electronic publishing, the possibilities for dynamic graphics are opening up. We demonstrate the usefulness of introducing motion into perceptual maps through four examples. The first example shows how a perceptual map can be viewed in three dimensions, and the second one moves between two analyses of the data that were collected according to different protocols. In a third example we move from the best view of the data at the individual level to one which focuses on between-group differences in aggregated data. A final example considers the case when several demographic variables or market segments are available for each respondent, showing an animation with increasingly detailed demographic comparisons. These examples of dynamic maps use several data sets from marketing and social science research.
    Keywords: Animation, brand-attribute maps, correspondence analysis, multidimensional scaling, perceptual map, visualization
    JEL: C19 C88
    Date: 2009–04
  2. By: Patrick Bajari; Jeremy Fox; Kyoo il Kim; Stephen P. Ryan
    Abstract: The random coefficients, multinomial choice logit model has been widely used in empirical choice analysis for the last 30 years. We are the first to prove that the distribution of random coefficients in this model is nonparametrically identified. Our approach exploits the structure of the logit model, and so requires no monotonicity assumptions and requires variation in product characteristics within only an infinitesimally small open set. Our identification argument is constructive and may be applied to other choice models with random coefficients.
    JEL: C14 C25 L00
    Date: 2009–04
  3. By: Agostino Tarsitano (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: Rank correlation is a fundamental tool to express dependence in cases in which the data are arranged in order. There are, by contrast, circumstances where the ordinal association is of a nonlinear type. In this paper we investigate the effectiveness of several measures of rank correlation. These measures have been divided into three classes: conventional rank correlations, weighted rank correlations, correlations of scores. Our findings suggest that none is systematically better than the other in all circumstances. However, a simply weighted version of the Kendall rank correlation coefficient provides plausible answers to many special situations where intercategory distances could not be considered on the same basis.
    Keywords: Ordinal Data, Nonlinear Association, Weighted Rank Correlation
    Date: 2009–04
  4. By: Ivan Soraperra (University of Trento)
    Abstract: This paper develops a model of choice that embeds some psychological aspects affecting decision maker's behaviour. In the model, the decision maker attaches an unobservable psychological index -representing, e.g., the level of perceived availability or the level of salience- to each alternative in a universal collection. Choice behaviour of the decision maker is then conditioned by the indexes attached to the alternatives. With this paper we show that, if the conditional choice behaviour satisfies two intuitively appealing properties -namely Monotonicity and Conditional IIA- then the observable part of the choice behaviour, i.e., the unconditional choices, can be interpreted as the product of the maximization of a preference relation. The paper discusses also some welfare consideration regarding the choice model and finally some interpretations of the indexes are provided.
    Keywords: Revealed preferences, Choice with frame, Salience, Scarcity bias, Bandwagon effect, Snob effect
    JEL: D11
    Date: 2009–04
  5. By: David Roodman
    Abstract: At the heart of many econometric models is a linear function and a normal error. Examples include the classical small-sample linear regression model and the probit, ordered probit, multinomial probit, Tobit, interval regression, and truncateddistribution regression models. Because the normal distribution has a natural multidimensional generalization, such models can be combined into multi-equation systems in which the errors share a multivariate normal distribution. The literature has historically focused on multi-stage procedures for estimating mixed models, which are more efficiently computationally, if less so statistically, than maximum likelihood (ML). But faster computers and simulated likelihood methods such as the Geweke, Hajivassiliou, and Keane (GHK) algorithm for estimating higherdimensional cumulative normal distributions have made direct ML estimation practical. ML also facilitates a generalization to switching, selection, and other models in which the number and types of equations vary by observation. The Stata module cmp fits Seemingly Unrelated Regressions (SUR) models of this broad family. Its estimator is also consistent for recursive systems in which all endogenous variables appear on the right-hand-sides as observed. If all the equations are structural, then estimation is full-information maximum likelihood (FIML). If only the final stage or stages are, then it is limited-information maximum likelihood (LIML). cmp can mimic a dozen built-in Stata commands and several user-written ones. It is also appropriate for a panoply of models previously hard to estimate. Heteroskedasticity, however, can render it inconsistent. This paper explains the theory and implementation of cmp and of a related Mata function, ghk2(), that implements the GHK algorithm.
    Keywords: econometrics, cmp, GHK algorithm, seemingly unrelated regressions
    Date: 2009–03
  6. By: James, Jennifer S.; Rickard, Bradley J.; Rossman, William J.
    Abstract: Recently there is much interest among horticultural producers concerning the marketing of organically- and locally- produced food. Here we developed a consumer survey that asked respondents to choose an applesauce product from a list of products differentiated by price and four attributes. The products were differentiated by labels that described fat content, nutrition content, and whether the product was grown organically and/or locally. The survey was distributed to 3,000 residents in rural Pennsylvania and over 1,500 responses were collected yielding a response rate of 56%. Survey results were used to assess consumersâ willingness to pay for the product attributes in applesauce, and we found that consumers were willing to pay more for locally-grown applesauce compared to applesauce that was labeled organic or low fat and low sugar. Furthermore, the analysis incorporated the effects of consumer characteristics on the demand for applesauce attributes and we find evidence that increased knowledge of agriculture decreases the willingness to pay for organically- and locally-grown applesauce.
    Keywords: Applesauce, Choice experiment, Consumer demand, Fruit and vegetable markets, Locally grown, Multinomial logit model, Organic, Pennsylvania, Willingness to pay, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Q13,
    Date: 2009–01–29
  7. By: Ortega, David L.; Wang, H. Holly; Wu, Laping
    Abstract: Chinaâs transition into a developed economy is driving changes in consumer preferences and demand for foods. To evaluate consumer preferences for U.S. pork in urban China, primary data were collected in two metropolitan areas- Beijing and Shanghai. Estimated logit models revealed that an individualâs age, shopping location and food safety concerns significantly influenced their willingness-to-pay for U.S. pork. A proportional linear model was developed to evaluate factors affecting purchasing behavior of western-style pork cuts vs. traditional Chinese cuts. Food safety concerns were linked to a previous lean-meat additive scare and a lack of consumer confidence on the Chinese food inspection system.
    Keywords: China, U.S. Pork, Willingness-to-pay, Ordered Logit, food safety, Agricultural and Food Policy, Consumer/Household Economics, Marketing, D120, D190, M390, Q130, Q180,
    Date: 2009

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