nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2009‒10‒24
five papers chosen by
Philip Yu
Hong Kong University

  1. Ideology and Existence of 50%-Majority Equilibria in Multidimensional Spatial Voting Models By Hervé Crès; M. Utku Ünver
  2. Respondent Certainty and Payment Vehicle Effect in Contingent Valuation: an Empirical Study for the Conservation of Two Endangered Species in Zakynthos Island, Greece By Stithou, Mavra
  3. A General Treatment of Non-Response Data From Choice Experiments Using Logit Models By Kelvin Balcombe; Iain Fraser
  4. Traffic Lights and Food Choice: A Choice Experiment Examining the Relationship Between Nutritional Food Labels and Price By Kelvin Balcombe; Iain Fraser; Salvatore Di Falco
  5. Estimating WTP With Uncertainty Choice Contingent Valuation By Kelvin Balcombe; Aurelia Samuel; Iain Fraser

  1. By: Hervé Crès (Institut d’Études Politiques de Paris); M. Utku Ünver (Boston College)
    Abstract: When aggregating individual preferences through the majority rule in an n-dimensional spatial voting model, the ‘worst-case’ scenario is a social choice configuration where no political equilibrium exists unless a super majority rate as high as 1 − 1/n is adopted. In this paper we assume that a lower d-dimensional (d < n) linear map spans the possible candidates’ platforms. These d ‘ideological’ dimensions imply some linkages between the n political issues. We randomize over these linkages and show that there almost surely exists a 50%-majority equilibria in the above worst-case scenario, when n grows to infinity. Moreover the equilibrium is the mean voter. The speed of convergence (toward 50%) of the super majority rate guaranteeing existence of equilibrium is computed for d = 1 and 2.
    Keywords: Spatial voting, super majority, ideology, mean voter theorem, random point set.
    JEL: D71 D72
    Date: 2008–09–17
  2. By: Stithou, Mavra
    Abstract: This paper focuses on providing evidence of what explains respondent certainty by assessing at the same time the sensitivity of the Contingent Valuation Method (CVM) to payment vehicle effect. Two different samples were collected from local residents and foreign visitors of the Zakynthos Island in Greece and a split-sample approach was employed. The elicited conservation values concerned two endangered species, the loggerhead turtle, Caretta caretta and the monk seal, Monachus monachus. In terms of policy implications, the stated Willingness-to-Pay (WTP) values confirmed that there is a potential for a range of internal funding options, which could sustain the future operation of the existing National Marine Park of Zakynthos (NMPZ). From a methodological point of view, the study explores the determinants of self-reported certainty with regard not only to different payment modes but also to attitudinal and socio-economic variables and adds evidence to the debate about the validity of CVM by testing the presence of a payment vehicle effect. The results show evidence of sensitivity of the method to the mode of payment and reveal a relationship between the chosen payment vehicle and respondents' degree of certainty.
    Keywords: National Marine Park of Zakynthos (Greece); Contingent Valuation; Biodiversity Conservation; Payment Vehicle Effect; Polychotomous Choice; Respondent Certainty
    Date: 2009–09
  3. By: Kelvin Balcombe; Iain Fraser
    Abstract: A new approach is developed for the treatment of 'Don't Know' (DK) responses, within Choice Experiments. A DK option is motivated by the need to allow respondents the opportunity to express uncertainty. Our model explains a DK using an entropy measure of the similarity between options given to respondents within the Choice Experiment. We illustrate our model by applying it to a Choice Experiment examining consumer preferences for nutrient contents in food. We find that similarity between options in a given choice set does explain the tendency for respondents to report DK.
    Keywords: Choice Experiment; Respondent Uncertainty; Bayesian Methods
    JEL: C35 I18 Q18
    Date: 2009–10
  4. By: Kelvin Balcombe; Iain Fraser; Salvatore Di Falco
    Abstract: In this paper we investigate how consumers respond to the UK food label Traffic Light System (TLS). Employing a Choice Experiment (CE) we find that consumers appear to behave in a manner consistent with our expectations regarding the impact of the TLS nutrition label. In particular, we identify a strong preference on the part of respondents to avoid a basket of goods containing a mix of foods with any "Red" lights. We have also found that consumers have a hierarchy of importance in terms of perception of the various nutrients examined and clear behavioural differences associated with particular socio-economic characteristics confirming early research on the use of nutrition labels. Overall our results indicate significant heterogeneity in the attitudes and responses of consumers to food labels within and across socioeconomic strata in terms of the magnitude of WTP.
    Keywords: Nutrients; Traffic Light System; Choice Experiment; Bayesian Mixed Logit
    JEL: C72 D01 H41
    Date: 2009–10
  5. By: Kelvin Balcombe; Aurelia Samuel; Iain Fraser
    Abstract: A method for treating Contingent Valuation data obtained from a polychotomous response format designed to accommodate respondent uncertainty is developed. The parameters that determine the probability of indefinite responses are estimated and used to truncate utility distributions within a structural model. The likelihood function for this model is derived, along with the posterior distributions that can be used for estimation within a Bayesian Monte Carlo Markov Chain framework. We use this model to examine two data sets and test a number of model related hypotheses. Our results are consistent with those from the psychology literature relating to uncertain response: a ‘probable no’ is more likely to suggest a defiite no, than a ‘probable yes’ is likely to suggest a definite yes. We also find that ’don’t know’ responses are context dependent. Comparing the performance of the methods developed in this paper with the ordered Probit which has been previously used in the literature with this type of data we find our methods outperform the ordered Probit for one of the data sets used.
    Keywords: Respondent uncertainty; multiple bound contingent valuation; Bayesian MCMC
    JEL: C35 I18 Q5
    Date: 2009–10

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