nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2010‒08‒06
three papers chosen by
Philip Yu
Hong Kong University

  1. Residential choices and interaction in three-member households: a choice experiment. By Edoardo Marcucci; Amanda Stathopoulos; Romeo Danielis; Lucia Rotaris
  2. Cattle farmersâ preferences for Disease Free Zones: a choice experiment analysis in Kenya By Otieno, David J.; Ruto, Eric; Hubbard, L.J.
  3. Estimating ordered categorical variables using panel data: a generalized ordered probit model with an autofit procedure By Pfarr, Christian; Schmid, Andreas; Schneider, Udo

  1. By: Edoardo Marcucci (DIPES/CREI, Faculty of Political Science, University of Roma Tre.); Amanda Stathopoulos (DISES, Faculty of Economics, University of Trieste.); Romeo Danielis (DISES, Faculty of Economics, University of Trieste.); Lucia Rotaris (DISES, Faculty of Economics, University of Trieste.)
    Abstract: Microeconomics studies group behaviour by using the representative member model. However, there is growing evidence that there can be significant differences between choices made by single individuals and those made by the same individuals when choosing collectively. This study investigates the differences between individual and joint decisionmaking in the context of residential location choice. It is widely recognized that household location choices involve several members of a household with heterogeneous preferences and influence power. Nonetheless little is known about group decision-making processes in practice. In particular, there is only scant evidence on how preferences differ among family members and to what extent individual preferences can be aggregated to achieve an approximation of joint choices. The study evaluates whether there is heterogeneity in single members’ preferences. Furthermore, relative power is inferred by measuring similarity between ex ante single preferences and ex post joint choice outcomes. We also quantify the implicit bias generated by relying on the representative member approach. These issues are tested by employing a two-stage conjoint choice experiment administered to a sample of 53 Italian families. This work proposes a novel extension of the commonly used dyadic interaction approach to consider the role of adolescents in household decision-making.
    Keywords: Unitary household, stated choice experiments, residential location, agent interaction and relative influence, discrete choice models, MNL, MMNL.
    JEL: D12 C35 D79
    Date: 2010
  2. By: Otieno, David J.; Ruto, Eric; Hubbard, L.J.
    Abstract: Management of food-borne illnesses is important in ensuring food safety to consumers in both domestic and export markets. In livestock trade, various measures are prescribed under the Sanitary and Phytosanitary Standards (SPS) agreement of the World Trade Organization (WTO). With regard to food safety, the SPS agreement recommends establishment of Disease Free Zones (DFZs)in order to manage the spread of trans-boundary cattle diseases. DFZs have been successfully implemented in major beef exporting countries such as Australia, Botswana, Brazil and Namibia. In Kenya however, the DFZs are still in a pilot stage and it is important to understand farmersâ preferences on the type of DFZ that would be readily acceptable to them. A choice experiment survey was conducted in Kenya using a D-optimal design to determine the main attributes that farmers prefer in a DFZ. A total of 343 farmers were interviewed and the data analysed using random parameter logit models. Results showed that farmers would be willing to participate in a DFZ where they are provided with adequate training on pasture development, record keeping and disease monitoring skills; cattle are properly labelled for ease of identification; market information and sales contract opportunities are guaranteed; and some monetary compensation is provided in case cattle die due to severe disease outbreaks. Preferences for the DFZ attributes are heterogeneous across different cattle production systems in Kenya. These findings have important implications for policy on the design of DFZ programmes in Kenya and other countries that face cattle disease challenges.
    Keywords: Farmer preferences, Disease Free Zone, choice experiment, Random Parameter Logit, Kenya, Livestock Production/Industries,
    Date: 2010–03–29
  3. By: Pfarr, Christian; Schmid, Andreas; Schneider, Udo
    Abstract: Estimation procedures for ordered categories usually assume that the estimated coefficients of independent variables do not vary between the categories (parallel-lines assumption). This view neglects possible heterogeneous effects of some explaining factors. This paper describes the use of an autofit option for identifying variables that meet the parallel-lines assumption when estimating a random effects generalized ordered probit model. We combine the test procedure developed by Richard Williams (gologit2) with the random effects estimation command regoprob by Stefan Boes.
    Keywords: generalized ordered probit; panel data; autofit, self-assessed health
    JEL: C87 C23 C25 I10
    Date: 2010–06–10

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