nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2010‒10‒23
six papers chosen by
Philip Yu
Hong Kong University

  1. Ranking Models in Conjoint Analysis By Lam, K.Y.; Koning, A.J.; Franses, Ph.H.B.F.
  3. The first time is the hardest: A test of ordering effects in choice experiments By Carlsson, Fredrik; Raun Mørkbak, Morten; Bøye Olsen, Søren
  4. Truth in Consequentiality: Theory and Field Evidence on Discrete Choice Experiments By Frédéric Roy-Vigneault; Daniel Rondeau; Maurice Doyon; Christian A. Vossler
  5. Consumer Preferences for Water Supply? An Application of Choice Models to Urban India By P.B. Anand
  6. Estimating Dynamic Discrete Choice Models with Hyperbolic Discounting, with an Application to Mammography Decisions By Hanming Fang; Yang Wang

  1. By: Lam, K.Y.; Koning, A.J.; Franses, Ph.H.B.F.
    Abstract: In this paper we consider the estimation of probabilistic ranking models in the context of conjoint experiments. By using approximate rather than exact ranking probabilities, we do not need to compute high-dimensional integrals. We extend the approximation technique proposed by \citet{Henery1981} in the Thurstone-Mosteller-Daniels model for any Thurstone order statistics model and we show that our approach allows for a unified approach. Moreover, our approach also allows for the analysis of any partial ranking. Partial rankings are essential in practical conjoint analysis to collect data efficiently to relieve respondents' task burden.
    Keywords: conjoint experiments;partial rankings;thurstone order statistics model
    Date: 2010–10–12
  2. By: Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: The research presented here considers the performance of the Fractional Multinomial Logit (FMNL) model in explaining expenditure shares using data from the 2005/06 South African Income and Expenditure Survey. The results suggest that the FMNL performs favourably, when the dataset is large enough, but that it does not perform as well, when the dataset is limited. Expenditure elasticities were also estimated, and compared to the expenditure shares from a QUAIDS model. The resulting expenditure shares are fairly similar across model specification; however, the FMNL model does incorporate additional curvature, which is easily observed when comparing the QUAIDS elasticities to the FMNL elasticities.
    Keywords: Expenditure Shares, Multinomial Fractional Logit.
    Date: 2010–10
  3. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Raun Mørkbak, Morten (Institute of Food and Resource Economics, University of Copenhagen); Bøye Olsen, Søren (Institute of Food and Resource Economics, University of Copenhagen)
    Abstract: This paper addresses the issue of ordering effects in choice experiments, and in particular how learning processes potentially affect respondents’ stated preferences in a sequence of choice sets. In a case study concerning food quality attributes of chicken breast filets, we find evidence of ordering effects in a sequence of 16 choice sets, where the last 8 choice sets are identical to the first 8. The overall preference structure is found to differ significantly between the two identical sequences of choice sets, and significant increases in marginal WTP are found for two out of four attributes. We find a reduction in the error variance for the last 8 choice sets relative to the first 8 choice sets. In particular, this difference is ascribed to the first choice set obtaining a significantly higher error variance than all succeeding choice sets, suggesting institutional learning rather than preference learning effects underlying the observed ordering effect. This is further supported by the fact that the differences in WTP become insignificant when removing the first choice set from the analysis. We find no evidence of fatigue, and we argue that our findings cannot be explained by starting point or strategic behavior effects.<p>
    Keywords: Choice Experiments; Fatigue; Learning; Ordering Effects; WTP
    JEL: C91
    Date: 2010–10–11
  4. By: Frédéric Roy-Vigneault; Daniel Rondeau; Maurice Doyon; Christian A. Vossler
    Abstract: This paper explores methodological issues surrounding the use of discrete choice experiments to elicit values for public goods. We develop an explicit game-theoretic model of individual decisions to a series of choice sets, providing general conditions under which surveys with repeated binary choices are incentive compatible. We complement the theory with a framed field experiment, with treatments that span the spectrum from incentive compatible, financially binding decisions to decisions with no direct financial consequences. The results suggest truthful preference revelation is possible in surveys, provided that respondents view their decisions as having more than a weak chance of influencing policy. <P>Cette étude s’intéresse à des aspects méthodologiques associés à l’utilisation d’expériences avec choix discrets pour évaluer des biens publics. Nous avons développé un modèle explicite de jeux théoriques pour des décisions individuelles à des séries de choix, avec conditions générales sous lesquelles un questionnaire avec des choix binaires répétés incite la révélation des valeurs. Ce développement théorique est suivi d’expériences terrains avec traitements qui couvrent le spectre des incitatifs de la révélation des valeurs, passant de la décision avec mise en place réelle du projet et paiements réels de la part des participants, à celle sans aucune conséquence financière directe et avec projets hypothétiques. Les résultats indiquent qu’il est possible d’obtenir une révélation des valeurs réelles en situation hypothétique, si les participants pensent que leurs décisions ont un potentiel d’impact significatif sur une éventuelle politique.
    Keywords: discrete choice experiment, framed field experiment, mechanism design theory, stated preferences, consequentiality , expériences avec choix discrets; expérience terrain; préférences révélées; conséquences, biais hypothétique
    JEL: C93 D72 D82 H41 Q51
    Date: 2010–10–01
  5. By: P.B. Anand
    Abstract: This paper examines consumer preferences for the attributes of alternative sources of water supply in Chennai, based on a household survey where respondents were given the description of a set of options. Their decision to choose one of the options is examined using discrete choice models. Whether consumer preferences are hierarchical or lexicographic is also briefly examined. Access to a yard tap is considered to be a more important attribute than water quantity, quality and the provider (the private sector or public sector). In general, the estimated willingness to pay is substantially higher than the present monthly water expenditures. [DiscussionPaperNo.2001/145]
    Keywords: watersupply,consumerpreferences,discretechoice,lexicographic, preferences
    Date: 2010
  6. By: Hanming Fang (Department of Economics, University of Pennsylvania); Yang Wang (Department of Economics, Lafayette College)
    Abstract: We extend the semi-parametric estimation method for dynamic discrete choice models using Hotz and Miller’s (1993) conditional choice probability (CCP) approach to the setting where individuals may have hyperbolic discounting time preferences and may be naive about their time inconsistency. We illustrate the proposed estimation method with an empirical application of adult women’s decisions to undertake mammography to evaluate the importance of present bias and naivety in the under-utilization of this preventive health care. Our results show evidence for both present bias and naivety.
    Keywords: Time Inconsistent Preferences, Intrapersonal Games, Dynamic Discrete Choices, Preventive Care
    JEL: C14 I1
    Date: 2010–10–04

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