nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2014‒01‒17
seven papers chosen by
Edoardo Marcucci
Universita' di Roma Tre

  1. Inter-format competition among retailers: The role of private label products in market delineation By Haucap, Justus; Heimeshoff, Ulrich; Klein, Gordon J.; Rickert, Dennis; Wey, Christian
  2. Measuring the Value of Time in Freight Transportation By KONISHI Yoko; Se-il MUN; NISHIYAMA Yoshihiko; Ji Eun SUNG
  3. German Energiewende and the Heating Market - Impact and Limits of Policy By Klaas Bauermann
  4. Examining the Tradeoff between Fixed Pay and Performance-related Pay: A Choice Experiment Approach By Junyi Shen; Kazuhito Ogawa; Hiromasa Takahashi
  5. Integrating Life Cycle Assessment and Choice Analysis for Alternative Fuel Valuation By Bhavik Bakshi; Nathan Cruze; Tim Haab; Matthew Winden
  6. Extending the Scope of Cube Root Asymptotics By Taisuke Otsu; Myung Hwan Seo
  7. Monetized value of the environmental, health and resource externalities of soy biodiesel By Bhavik Bakshi; Nathan Cruze; Tim Haab; Matthew Winden

  1. By: Haucap, Justus; Heimeshoff, Ulrich; Klein, Gordon J.; Rickert, Dennis; Wey, Christian
    Abstract: This paper analyses the extent of inter-format retail competition between supermarkets, discounters and drugstores in Germany, using data from the German market for diapers. We estimate a random coefficient logit model at the individual household level. Based on consumer substitution patterns, we calculate manufacturers' and retailers' estimated marginal costs and margins and, based on these margins, apply standard market delineation techniques which suggest that the strongest substitution patterns are between the leading manufacturer brand and private labels sold at drugstores and discounters. This finding contrasts with recent speculations by competition authorities that private label products may belong to a different antitrust market than manufacturers' brands. --
    Keywords: Discrete Choice,Demand Estimation,Market Delineation,Grocery Retail Markets,Antitrust
    JEL: L1 L4 L8 C5
    Date: 2013
  2. By: KONISHI Yoko; Se-il MUN; NISHIYAMA Yoshihiko; Ji Eun SUNG
    Abstract: This paper presents an alternative approach to measuring the values of transport time for freight transportation, and examines its applicability through empirical analysis. We develop a model of the freight transportation market, in which carriers incur the cost associated with the effort to reduce transport time, and transport time is endogenously determined in the market. We estimate the freight charge function, expressway choice model, and transport time function, using microdata of freight flow in Japan collected by the Ministry of Land, Infrastructure, Transport and Tourism. Based on the estimated freight charge function, we obtain the values of transport time for shippers as an implicit price in the hedonic theory. The estimated values of transport time for shippers are larger than those obtained by the widely adopted method based on the discrete choice model. We also develop a method to evaluate the benefit of time-saving technological change (including infrastructure improvement) based on the hedonic approach. Application to the evaluation of expressway construction suggests that the benefits calculated by our method tend to be larger than those based on the other methods.
    Date: 2014–01
  3. By: Klaas Bauermann (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen)
    Abstract: The German Energiewende envisages achieving a climate-neutral building stock in 2050 by means of two major pillars of regulation: First, residential buildings should consume 80% less primary energy and, second, the remaining energy demand should be covered primarily with renewables. This paper simulates the future heating market in Germany under different policy scenarios in order to evaluate the impact and limits of recent and conceivable heating market policy. The investigation is based upon a dual model approach, linking a residential heating model to a discrete choice model for the heating system purchase decision. The major finding is that current ‚regulations will not be suitable for meeting government targets. Carbon emission reductions in scenarios assuming current regulation nearly equal those where there is no regulation. In terms of economic efficiency, all calculated policy alternatives perform better than the regulation currently in place. The model results highlight two policy implications. First, rising renewable requirements deliver better results at lower costs. Second, renewable obligations for heating systems must include the existing building stock in order to achieve the postulated political targets.
    Keywords: Residential Heating Market, Policy Evaluation, Decarbonisation, Discrete Choice
    JEL: E27 E61 H21 O18 O38 C35 C53
    Date: 2013–05
  4. By: Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Kazuhito Ogawa (Faculty of Sociology, Kansai University); Hiromasa Takahashi (Faculty of International Studies, Hiroshima City University)
    Abstract: Previous investigations on performance-related pay have mainly analyzed its relationships with earnings, productivity, and job satisfaction. Less attention has been devoted to the investigations of individuals’ preferences for the performance-related payment system per se and consequently the tradeoff between fixed pay and performance-related pay. In this paper, we first use a choice experiment approach to investigate the tradeoff between fixed pay and performance-related pay, and then link the tradeoff for each individual with their risk preferences. Our main results indicate that individuals’ preferences for the payment system per se and the magnitude of tradeoffs between fixed pay and performance pay are different according to their risk preferences.
    Keywords: fixed pay; performance-related pay; choice experiment; risk preference
    JEL: C35 J33
    Date: 2014–01
  5. By: Bhavik Bakshi (Department of Chem. and Biom. Engineering, The Ohio State University); Nathan Cruze (Department of Statistics, The Ohio State University); Tim Haab (Department of Ag., Env., and Dev. Economics, The Ohio State University); Matthew Winden (Department of Economics, University of Wisconsin - Whitewater)
    Abstract: We develop a framework for modeling the technological, economic, environmental, and social impacts of the life cycle of seven transportation fuels (Corn, Stover, Switchgrass, Yellow Poplar, Newsprint and Municipal Solid Waste Ethanol Blends, as well as Gasoline), by linking engineering based life cycle analysis of transportation fuels with choice analysis techniques for eliciting and understanding the social preferences for multi-attribute consumption vectors. The use of life-cycle data allows us to account for a broad range of environmental, natural resource, and health effects over the entire production and consumption life cycle of each fuel. Combining these life cycle and stated choice analyses allows for social preferences to be established for the externalities resulting from the use of the different transportation fuels. This results in a unique physical-economic feedback model allowing for improved design and evaluation of transportation policy. Our results indicate first generation biofuels, such as Corn E10 and Corn E85, actually result in a net increase in the value of environmental damage, natural resource use and human health risk relative to gasoline. After accounting for life cycle costs, these popular “alternative” fuel options offer little apparent environmental or health benefits, calling into question policies encouraging their adoption as “green” fuels. For policies with the intent of reducing foreign oil dependency and encouraging resource conservation, these same fuels may have merit. Most of the cellulosic, or second generation, biofuels have the potential to create a net improvement in environmental, natural resource, and human health impacts. Our results indicate significant trade-offs between environmental damage, human health risks and resource depletion rates will have to be made in any attempt to implement alternative fuel policy at a national level.
    Keywords: Life Cycle Impact Assessment, Choice Analysis, Fuel Valuation, Integration Techniques
    JEL: Q42 Q48 Q51 Q53
    Date: 2013–08
  6. By: Taisuke Otsu; Myung Hwan Seo
    Abstract: This article extends the scope of cube root asymptotics for M-estimators in two directions: allow weakly dependent observations and criterion functions drifting with the sample size typically due to a bandwidth sequence. For dependent empirical processes that characterize criterions inducing cube root phenomena, maximal inequalities are established to derive the convergence rates and limit laws of the M-estimators. The limit theory is applied not only to extend existing examples, such as the maximum score estimator, nonparametric maximum likelihood density estimator under monotonicity, and least median of squares, toward weakly dependent observations, but also to address some open questions, such as asymptotic properties of the minimum volume predictive region, conditional maximum score estimator for a panel data discrete choice model, and Hough transform estimator with a drifting tuning parameter.
    Keywords: Cube root asymptotics, M-estimator, Maximal inequality
    JEL: C13
    Date: 2014–01
  7. By: Bhavik Bakshi (Department of Chem. and Biom. Engineering, The Ohio State University); Nathan Cruze (Department of Statistics, The Ohio State University); Tim Haab (Department of Ag., Env., and Dev. Economics, The Ohio State University); Matthew Winden (Department of Economics, University of Wisconsin - Whitewater)
    Abstract: This study monetizes the life cycle environmental damage, human health risk, and resource depletion externalities associated with the production and use of biodiesel fuels from soybean feedstock. Utilizing an integrated economic-environmental assessment framework that couples life cycle impacts and a conjoint choice experiment for social preference elicitation allows for a comprehensive comparison of petrodiesel and biodiesel’s external impacts. The results of the study reveal the production and consumption of soybean based biodiesels produce net improvements in environmental, health and resource impacts of $0.27 per gallon relative to petrodiesel for a 20% blend and $3.14 per gallon for a 100% blend.
    Keywords: Valuation, Biodiesel, Externality, LCIA
    JEL: Q42 Q48 Q51 Q53
    Date: 2013–09

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