nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2013‒07‒05
six papers chosen by
Edoardo Marcucci
Universita' di Roma Tre

  1. Purchase Intention Effects in Experimental Auctions and Real Choice Experiments By Xie, Jing; Gao, Zhifeng; House, Lisa
  2. Analysis of Consumer Preferences and Willingness-to-Pay for Organic Food Products in Germany By Illichmann, Rebecca; Abdulai, Awudu
  3. The Puzzle of Valuation Gaps Between Experimental Auction and Real Choice Experiments: Do Purchase Intention and Price Bargaining Preference Matter? By Xie, Jing; Gao, Zhifeng; House, Lisa
  4. "Local is the New Organic": Do Consumers Agree? By Meas, Thong; Hu, Wuyang; Batte, Marvin T.; Woods, Timothy; Ernst, Stan
  5. The Choice of Airport, Airline, and Departure Date and Time: Estimating the Demand for Flights By Escobari, Diego; Mellado, Cristhian
  6. Competition between Private Label and National Brand for Health-differentiated Food Product: A Canadian Retailing Case By Ying, Xiongwei; Anders, Sven M.

  1. By: Xie, Jing; Gao, Zhifeng; House, Lisa
    Abstract: This article examines consumers’ preference for three types of orange juice in China. Two non-hypothetical experiments, Real Choice Experiments and Experimental Auctions were used in the study. We found that WTP estimates from real choice experiment are significantly higher than auction bids, which is consistent with what Lusk and Schroeder (2006) and Gracia, Loureiro, and Nayga (2011) found in their paper. In addition, we found that purchase intention only has significantly effects on consumers’ behavior in Experimental Auction, but not in Real Choice Experiments, and this purchase intention only has effects on non-novel food, but not novel food.
    Keywords: Consumer preferences, choice experiment, experimental auction, purchase intention, Agribusiness, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2013
  2. By: Illichmann, Rebecca; Abdulai, Awudu
    Abstract: This study employs a choice experiment approach to investigate consumers’ preferences and willingness-to-pay (WTP) for organic food products. We use mixed logit and latent class models to examine preference heterogeneity. The results revealed significant heterogeneity in preferences for organic apples, milk, and beef product attributes among consumers. The WTP results obtained from mixed logit indicate gender-specific differences for the examined products of this study. Female respondents have a significant higher WTP for apple attributes, while significant higher WTP values for beef attributes are observed for male respondents. The findings of the latent class models indicate that consumers’ trust tend to influence their preferences for organic food products.
    Keywords: Organic farming, choice experiment, preference heterogeneity, mixed logit, latent class model, Environmental Economics and Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods, C25, D12,
    Date: 2013
  3. By: Xie, Jing; Gao, Zhifeng; House, Lisa
    Abstract: This article examines the preferences revealed by two non-hypothetical experiments. We found that WTP estimates from real choice experiment are significantly than auction bids. We provide two possible reasons for it: consumers’ purchase intention and aggressiveness in price bargaining. Our results suggest that the discrepancies among experiments can come from the heterogeneity of respondents’ price bargaining aggressiveness, but not from purchase intention differences.
    Keywords: Consumer preferences, choice experiment, auction, purchase intention, price bargaining aggressiveness, Consumer/Household Economics,
    Date: 2013
  4. By: Meas, Thong; Hu, Wuyang; Batte, Marvin T.; Woods, Timothy; Ernst, Stan
    Abstract: There have been numerous studies and growing interests to identify consumer preferences and compare willingness-to-pay for different value-added food labels or attributes. This paper uses stated preference data from choice experiments in a mail survey in Kentucky and Ohio to analyze consumer preferences for a host of value-added attributes of processed blackberry jam. Results from the study confirm positive willingness-to-pay for both organic and local attributes as well as other label claims. However, consumers were found to be willing to pay less for organic blackberry jam than jam identified as being produced in smaller state regions. Furthermore, the study found some evidence of substitution between these two attributes, an issue receiving minimal attention in the existing literature.
    Keywords: willingness-to-pay, local and organic processed food products, choice experiment, conditional logit model, Mixed Logit model, processed food labels, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Q13,
    Date: 2013
  5. By: Escobari, Diego; Mellado, Cristhian
    Abstract: This paper estimates the demand for flights in an international air travel market using a unique dataset with detailed information not only on flight choices but also on contemporaneous prices and characteristics of all the alternative non-booked flights. The estimation strategy employs a simple discrete choice random utility model that we use to analyze how choices and its response to prices depend on the departing airport, the identity of the carrier, and the departure date and time. The results show that a 10\% increase in prices in a 100-seat aircraft throughout a 100-period selling season decreases quantity demanded by 7.7 seats. We also find that the quantity demanded is more responsive to prices for Delta and American, during morning and evening flights and that the response to prices changes significantly over different departure dates.
    Keywords: Airline demand, discrete choice, flight choice, demand estimation.
    JEL: C25 L93 R41
    Date: 2013–07
  6. By: Ying, Xiongwei; Anders, Sven M.
    Abstract: Retailers in Canada are beginning to introduce private labels to gain vertical bargaining power over manufacturers and horizontal differentiation among retailers. Product differentiation in health and wellness is an emerging trend for both private labels and national brands. This study applies a model derived from a random utility nested logit model to estimate the extent to which consumer choice of health-related food attributes has affected retailer pricing and brand-level competition, using the Distance-Matrix (DM) approach to identify the location of both private label and national brands of canned soup market in their attribute space. It suggests that private label does not have a positive effect on retailers’ demand.
    Keywords: private label, national brand, health differentiation, distance matrix, nested logit, Food Consumption/Nutrition/Food Safety, Production Economics,
    Date: 2013

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