nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2012‒06‒05
ten papers chosen by
Philip Yu
Hong Kong University

  1. Rationalizing Choice with Multi-Self Models By Attila Ambrus; Kareen Rozen
  2. Preferences and Skills of Indian Public Sector Teachers By Fagernäs, Sonja; Pelkonen, Panu
  3. Food Authenticity, Technology and Consumer Acceptance By Hobbs, Jill E.; McDonald, Jill; Zhang, Jing
  4. New Age, New Learners, New Skills: What Skills Do Graduates Need to Succeed in the New Economy? By Noel, Jay E.; Qenani, Eivis
  5. On the use of honesty priming task to mitigate hypothetical bias in choice By de Magistris, Tiziana; Gracia, Azucena; Nayga, Rodolfo M., Jr.
  6. An Information-Theoretic Approach to Modeling Binary Choices: Estimating Willingness to Pay for Recreation Site Attributes By Henry-Osorio, Miguel; Mittelhammer, Ronald C.
  7. How Do Restaurants Benefit from Various Components of a Regional Promotion Campaign? By XIE, RAN; Isengildina-Massa, Olga; Carpio, Carlos E.
  8. Finding True Consumer Attitudes: Do Validation Questions Help? By Gao, Zhifeng; House, Lisa; Bi, Xiang
  9. Discrete Choice Modeling of Consumer Preferences for Sustainably Produced Steak and Apples By Sackett, Hillary M.; Shupp, Robert S.; Tonsor, Glynn T.
  10. EDUCATION AND LABOUR MARKET OUTCOMES: EVIDENCE FROM BRAZIL By R Freguglia; G Spricigo; Geraint Johnes; A Aggarwal

  1. By: Attila Ambrus; Kareen Rozen
    Abstract: This paper studies a class of multi-self decision-making models proposed in economics, psychology, and marketing. In this class, choices arise from the set-dependent aggregation of a collection of utility functions, where the aggregation procedure satisfies some simple properties. We propose a method for characterizing the extent of irrationality in a choice behavior, and use this measure to provide a lower bound on the set of choice behaviors that can be rationalized with n utility functions. Under an additional assumption (scale-invariance), we show that generically at most five "reasons" are needed for every "mistake."
    Keywords: Multi-self models, index of irrationality, IIA violations, rationalizability
    JEL: D11 D13 D71
    Date: 2012
  2. By: Fagernäs, Sonja (University of Sussex); Pelkonen, Panu (University of Sussex)
    Abstract: With a sample of 700 future public sector primary teachers in India, a Discrete Choice Experiment is used to measure job preferences, particularly regarding location. General skills are also tested. Urban origin teachers and women are more averse to remote locations than rural origin teachers and men respectively. The joint analysis of preferences and skills suggests that existing caste and gender quotas are detrimental for the objective of hiring skilled teachers willing to work in remote locations. The most preferred location is home, which supports decentralised hiring, although evidence suggests that in remote areas this could compromise skills.
    Keywords: discrete choice experiment, teacher recruitment, job preferences, hiring quotas, skills, India
    JEL: I25 J33 J45
    Date: 2012–05
  3. By: Hobbs, Jill E.; McDonald, Jill; Zhang, Jing
    Abstract: Traceability and authenticity issues have gained increasing prominence in food markets and create both opportunities and challenges for the food industry in providing credible information to consumers. Internal molecular tagging is an emerging technology with the potential to deliver traceability and authenticity assurances. A key question for the food industry in adopting new technologies is consumer acceptance. This paper explores consumer attitudes toward traceability and authenticity and the role of information in affecting consumer acceptance of new technologies, using molecular tagging as an example. Data were gathered from an online survey conducted in Canada in December 2010. To determine whether product-specific effects exist, two versions of the survey were used, focusing on salami and on apple juice. In a discrete choice experiment respondents were presented with choice sets describing an apple juice (salami) product containing different combinations of four attributes: traceability technology (molecular tag Vs RFID), price, brand, country of origin. Of particular interest was the effect of information on consumers’ choices. Therefore, respondents were randomly assigned to one of four information treatments: positive information on molecular tagging technology or further information on the issue of food authenticity and adulteration, or a combination of both. The control group was provided with neutral information on the technology and no additional information. Results from Conditional Logit and Random Parameter Logit models reveal that initial consumer acceptance of the technology is low, however, information matters. Highlighting the problems of adulteration reduces resistance more effectively than providing positive technology information, and the effects appear to be product specific across a juice product versus a processed meat product. Other proxy signals (country of origin, brand), resonate strongly with consumers and tended to have a larger impact on willingness-to-pay.
    Keywords: Traceability, authenticity, consumer acceptance, choice experiment, information treatment, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Research and Development/Tech Change/Emerging Technologies, Q13,
    Date: 2012
  4. By: Noel, Jay E.; Qenani, Eivis
    Abstract: The goal of this study was to improve the current understanding of labor market demands for various skills and attributes of college graduates. Changes such as globalization, technological advancements and the emergence of the knowledge economy have caused educational institutions to focus their attention in revising and redesigning their curriculum. The timely identification and the effective response to these changes requires that higher education revisits the issue of the set of skills essential to the economy and the labor market, and the best ways to transfer them to college graduates. A choice-based conjoint experiment was used to identify labor market preferences for college graduate attributes. A web survey with employers in the food and fiber industry was carried out during the months of September 2011-April 2012. Using an experimental design, hypothetical candidate profiles were created and used in an interactive conjoint survey. Hierarchical Bayesian method was used to estimate marginal utilities for college graduate attributes. Results of the study indicate that there has been a shift in the needs for skills in the labor market. New skills, such as creativity are emerging as important attributes to the knowledge economy.
    Keywords: Graduate Attributes, Creativity, Hierarchical Bayesian, Conjoint Analysis, Agribusiness, Institutional and Behavioral Economics, Labor and Human Capital, Teaching/Communication/Extension/Profession,
    Date: 2012
  5. By: de Magistris, Tiziana; Gracia, Azucena; Nayga, Rodolfo M., Jr.
    Abstract: We test whether the use of an honesty priming task from the social psychology literature can help mitigate hypothetical bias in stated preference choice experiments (CE). Using a between-sample design, we conducted experiments with five treatments: (1) hypothetical CE without cognitive task, (2) hypothetical CE with cheap talk script, (3) hypothetical CE with neutral priming task, (4) hypothetical CE with honesty priming task, and (5) non-hypothetical CE. Results generally suggest that marginal willingness to pay estimates from treatment 4 where subjects are given honesty priming task before the choice experiment are not statistically different from marginal valuations from treatment 5 where subjects are in a non-hypothetical choice experiment. Values from both these treatments are significantly lower than those from other three hypothetical treatments (treatments 1-3). Using hold out tasks, our results also suggest that one could get higher percentage of correct predictions of participants’ choices in treatments 4 and 5 than in treatments 1-3 and that there is no significant difference in percentage of correct predictions between treatments 4 and 5.
    Keywords: hypothetical bias, cheap talk, priming, Willingness-to-pay, Marketing, Research Methods/ Statistical Methods, C23, D12, Q18,
    Date: 2012
  6. By: Henry-Osorio, Miguel; Mittelhammer, Ronald C.
    Keywords: Minimum power divergence, Cressie-Read statistics, contingent valuation, empirical likelihood, discrete choice, binary response models, Environmental Economics and Policy, Research Methods/ Statistical Methods, C13, C14, C25, Q51,
    Date: 2012
  7. By: XIE, RAN; Isengildina-Massa, Olga; Carpio, Carlos E.
    Abstract: This study analyses the economic value of various components of the Certified South Carolina Grown Campaign from the perspective of participating restaurants. A stated-preference choice experiment was conducted as part of the restaurant survey to estimate the willingness to pay (WTP) for each campaign component using a mixed logit model. Individual level WTP was calculated in order to explore the relationship between WTP and characteristics of restaurants. Results indicate that three existing components--Labeling, Multimedia Advertising, and "Fresh on the Menu" have significant positive economic value.
    Keywords: WTP, Mixed Logit Model, SUR Model, Discrete Choice Model, Agribusiness, Agricultural and Food Policy, Political Economy, Production Economics, Research Methods/ Statistical Methods,
    Date: 2012
  8. By: Gao, Zhifeng; House, Lisa; Bi, Xiang
    Abstract: A survey with validation question was delivered to 3475 respondents to study the impact of using validation question to improve data quality. Results show that The respondents who passed the validation question had significantly older ages, higher median incomes and higher education levels. The WTP estimates with and without the respondents who fails the validation question differ significantly.
    Keywords: survey data quality, validation question, willingness to pay, seafood, choice experiment, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, Marketing,
    Date: 2012
  9. By: Sackett, Hillary M.; Shupp, Robert S.; Tonsor, Glynn T.
    Abstract: "Sustainably produced" food labels have rapidly grown in popularity over the past decade (Batte 2011). Moreover, because there is no government agency overseeing certication of these production methods, consumers are generally confused about the production attributes that may or may not be present in a sustainable food system. This paper analyzes data from a hypothetical choice experiment to better understand consumer purchasing behavior when faced with competing food production attributes such as "organic" and "local". We seek to estimate preferences for "sustainably produced" food products and determine how they may be aected by varying degrees of information about sustainable agricultural systems. Additionally, the willingness to pay measurements estimated in this paper provide insight into the trade-os perceived between current eco-labeling schemes, and the potential for differentiating "sustainably produced" products from their "organic" and "local" counterparts.
    Keywords: Sustainably Produced Food, Choice Experiment, Consumer Preferences, Food Consumption/Nutrition/Food Safety, Q01, Q13, Q11,
    Date: 2012
  10. By: R Freguglia; G Spricigo; Geraint Johnes; A Aggarwal
    Abstract: The effect of education on labour market outcomes is analysed using both survey and administrative data from The Brazilian PNAD and RAIS-MIGRA series, respectively. Occupational destination is examined using both multinomial logit analyses and structural dynamic discrete choice modelling. The latter approach is particularly useful as a means of evaluating policy impacts over time. We find that policy to expand educational provision leads initially to an increased take-up of education, and in the longer term leads to an increased propensity for workers to enter non-manual employment.
    Date: 2011

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