nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2013‒10‒11
four papers chosen by
Edoardo Marcucci
Universita' di Roma Tre

  1. A Recreation Demand Model of the North Carolina For-Hire Fishery: A Comparison of Primary and Secondary Purpose Anglers By John C. Whitehead; Christopher F. Dumas; Craig E. Landry; Jim Herstine
  2. Transportation Choices and the Value of Statistical Life By Gianmarco León; Edward Miguel
  3. Bayesian Inference and Non-Bayesian Prediction and Choice: Foundations and an Application to Entry Games with Multiple Equilibria By Larry G. Epstein; Kyoungwon Seo
  4. Enrollment costs, university quality and higher education choices in Italy By Pigini, Claudia; Staffolani, Stefano

  1. By: John C. Whitehead; Christopher F. Dumas; Craig E. Landry; Jim Herstine
    Abstract: In this paper we measure the recreational economic benefits of the for-hire recreational fishery in the coastal region of North Carolina. We estimate a single trip random utility model for primary purpose and secondary purpose anglers with data from a field survey of charter and head-boat passengers. We find that primary and secondary purpose anglers exhibit significantly different behavior with regards to cost. However, once costs are weighted for secondary purpose anglers the value of catch is not statistically different across groups. For primary purpose anglers, the willingness to pay per trip is between $1800 and $2000 for one additional billfish (per angler), between $55 and $65 for one additional coastal migratory pelagic fish, $39 for one additional mackerel, and the willingness to pay per trip for an additional snapper-grouper is between $61 and $94. The net economic value for a charter boat trip averages $624 per angler per trip, and net economic value for a head boat trip is $102 per angler per trip. Key Words:
    Date: 2013
  2. By: Gianmarco León; Edward Miguel
    Abstract: This paper exploits an unusual transportation setting to estimate the value of a statistical life (VSL). We estimate the trade-offs individuals are willing to make between mortality risk and cost as they travel to and from the international airport in Sierra Leone (which is separated from the capital Freetown by a body of water). Travelers choose from among multiple transport options – namely, ferry, helicopter, hovercraft, and water taxi. The setting and original dataset allow us to address some typical omitted variable concerns in order to generate some of the first revealed preference VSL estimates from Africa. The data also allows us to compare VSL estimates for travelers from 56 countries, including 20 African and 36 non -African countries, all facing the same choice situation. The average VSL estimate for African travelers in the sample is US$577,000 compared to US$924,000 for non-Africans. Individual characteristics, particularly job earnings, can largely account for the difference between Africans and non-Africans ; Africans in the sample typically earn somewhat less. There is little evidence that individual VSL estimates are driven by a lack of information, predicted life expectancy, or cultural norms around risk-taking or fatalism. The data implies an income elasticity of the VSL of 1.77. These revealed preference VSL estimates from a developing country fill an important gap in the existing literature, and can be used for a variety of public policy purposes, including in current debates within Sierra Leone regarding the desirability of constructing new transportation infrastructure.
    Keywords: value of statistical life, risk taking behavior, Africa, Sierra Leone
    JEL: J17 O18
    Date: 2013–09
  3. By: Larry G. Epstein (Department of Economics, Boston University); Kyoungwon Seo
    Abstract: We generalize de Finetti’s exchangeable Bayesian model to accommodate ambiguity. As a central motivating example, we consider a policy maker facing a cross-section of markets in which …rms play an entry game. Her theory is Nash equilibrium and it is incomplete because there are multiple equilibria and she does not understand how equilibria are selected. This leads to partial identi…cation of parameters when drawing inferences from realized outcomes in some markets and to ambiguity when considering (policy) decisions for other markets. We model both her inference and choice.
    Date: 2013–01
  4. By: Pigini, Claudia; Staffolani, Stefano
    Abstract: In this paper, we analyze the higher education choices of Italian secondary school leavers by addressing the roles of university quality, costs and geographical distance to the institution as well as the relationship between students’ choices and their personal and household’s attributes, such as individual secondary school background and the socio-economic condition of the family of origin. Grounding such decision process on the framework of the Random Utility Model (RUM), we provide empirical evidence on the determinants of students’ choices by estimating a nested logit model on the ISTAT survey of secondary school graduates. Results show that the effects of increasing costs of enrollments and university standards are strongly differentiated across sub-groups of individuals. In particular, the choice probability of weaker students, in the sense of secondary school background and household’s socio–economic condition, is more sensitive to changes in university costs and quality.
    Keywords: Enrollment cost, university quality, geographical distance, university choice, Random Utility Maximization model.
    JEL: C25 I21 I23 J24
    Date: 2013–10–03

This nep-dcm issue is ©2013 by Edoardo Marcucci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.