nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2010‒12‒18
six papers chosen by
Philip Yu
Hong Kong University

  1. Transitions to disability and rehabilitation By Leif Andreassen and Tom Kornstad
  2. Consumer Preferences for Water Supply? An Application of Choice Models to Urban India By P. B. Anand
  3. Dealing with negative marginal utilities in the discrete choice modelling of labour supply By Liégeois P; Islam N
  4. Recreational trip timing and duration prediction: A research note By Hailu, Atakelty; Gao, Lei
  5. Economic valuation of recreational fishing in Western Australia By Raguragavan, Jananee; Hailu, Atakelty; Burton, Michael
  6. The Value of Improved Public Services: An Application of the Choice Experiment Method to Estimate the Value of Improved Wastewater Treatment Infrastructure in India By Ekin Birol; Sukanya Das

  1. By: Leif Andreassen and Tom Kornstad (Statistics Norway)
    Abstract: The discrete choice model of McFadden (1973) is used to quantify the desire for going into rehabilitation or disability among fully employed married women in Norway. Predictions using the model indicate that as much as 60 percent of full-time employed married women going into disability or rehabilitation are not doing so entirely voluntarily. Using a set of identifying assumptions we decompose transitions into different components. Important findings are that decreasing unemployment has also played a significant role in increasing the number on disability and rehabilitation, while changes in disability benefits have not played a large role.
    Keywords: social security; disability; rehabilitation; discrete choice
    JEL: C35 H55 I12 I18
    Date: 2010–12
  2. 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 highe rthan the present monthly water expenditures. [DiscussionPaperNo.2001/145]
    Keywords: watersupply,consumerpreferences,discretechoice,lexicographic preferences
    Date: 2010
  3. By: Liégeois P; Islam N
    Abstract: In discrete choice labour supply analysis, it is often reasonably expected that utility is increasing with income. Yet, analyses based on discrete choice models sometimes mention that, when no restriction is imposed a priori in the statistical optimization program, the monotonicity condition is not fully satisfied ex post. Obviously, the standard statistical optimization program might be completed with conditions (one per individual) imposing positive marginal utilities. Unfortunately, such a high-dimensional program most often appears to be rather time-consuming in order to be solved, if not practically unsolvable. In order to overcome this drawback, some authors impose general parametric restrictions a priori (hence reducing de facto the dimension of the parameter set), which is sufficient to lead to positive marginal utilities ex post. However, those restrictions might sometimes appear to be unnecessarily too severe and then generate a sub-optimal set of estimated values for the parameters of the utility function. Alternatively, we show that it may be easy to avoid unnecessary restrictions. The high-dimensional program including conditions for positive marginal utilities for all can sometimes be equivalently replaced by a one-dimensional one. At the end, no observation is hopefully showing negative marginal utility anymore at optimum.
    JEL: C25 C61 H31 J22
    Date: 2010–11–23
  4. By: Hailu, Atakelty; Gao, Lei
    Abstract: This paper presents models that predict two recreational fishing trip parameters: the length of a trip and the timing of a trip within a year. A discrete choice (logit) model linking the choice of trip timing to calendar events, the demographic characteristics of anglers as well as the nature of the trip is econometrically estimated. A Tobit model is used to evaluate the relationship between fishing trip length and personal and trip characteristics. The results indicate that timing choice and trip length can be explained well in terms of observable personal and trip variables. Knowledge of these relationships is a useful input to tourism/recreational fishing management as well as to the development of tourism/fishing activity simulation models.
    Keywords: recreational fishing, trip timing, length of recreational trips, tourism simulation, environmental impact management, Environmental Economics and Policy,
    Date: 2010–11–30
  5. By: Raguragavan, Jananee; Hailu, Atakelty; Burton, Michael
    Abstract: Allocation of fish resource is a controversial subject. Decision making is partly made difficult by the lack of knowledge on recreational fishing preferences and the value of fishing opportunities. This study investigates fishing site choices in Western Australia. Recreational fishing data covering the eight major fishing regions and fourty eight fishing sites in the State are used. The data are used to estimate a random utility model (RUM) of site choice behaviour with a supporting negative binomial econometric model of angler and fish-specific expected catch rates. We provide value estimates for different fish types, fishing site attribute changes as well as site access values. It is argued that sound economic value estimates can be starkly different from ad hoc recreational estimates that are commonly cited or presented.
    Keywords: non-market valuation, recreational fishing, random utility models, fisheries management, marine environment management, Environmental Economics and Policy,
    Date: 2010–02–23
  6. By: Ekin Birol; Sukanya Das (Madras School of Economics)
    Abstract: In this paper we employ a stated preference environmental valuation technique, namely the choice experiment method, to estimate local public‟s willingness to pay (WTP) for improvements in the capacity and technology of a sewage treatment plant (STP) in Chandernagore municipality, located on the banks of the River Ganga in India. A pilot choice experiment study is administered to 150 randomly selected Chandernagore residents and the data are analysed using the conditional logit model with interactions. The results reveal that residents of this municipality are willing to pay significant amounts in terms of higher monthly municipality taxes to ensure the full capacity of the STP is used for primary treatment and the technology is upgraded to enable secondary treatment. Overall, the results reported in this paper supports increased investments to improve the capacity and technology of STPs to reduce water pollution, and hence environmental and health risks that are currently threatening the sustainability of the economic, cultural and religious values this sacred river generates.
    Keywords: choice experiment method, conditional logit model, River Ganga, sewage treatment plant, water quality, water quantity
    JEL: C25 C87 Q5 Q53
    Date: 2010

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