nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2014‒09‒25
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Environmental Goods By Czajkowski, Mikołaj; Hanley, Nick; LaRiviere, Jacob
  2. An investigation of the determinants of household demand for bushmeat in the Serengeti using an open-ended choice experiment By Moro, Mirko; Fischer, Anke; Milner-Gulland, EJ; Lowassa, Asanterabi; Naiman, Loiruck C; Hanley, Nick
  3. Linking Multi-Category Purchases to Latent Activities of Shoppers: Analysing Market Baskets by Topic Models By Hruschka, Harald
  4. Measuring the willingness-to-pay for others' consumption: an application to joint decisions of children By Sabrina BRUYNEEL; Laurens CHERCHYE; Sam COSAERT; Bram DE ROCK; Siegfried DEWITTE
  5. Joint Leisure Before and After Retirement : a double Regression Discontinuity Approach By Elena Stancanelli; Arthur Van Soest
  6. An Extension of the Blinder-Oaxaca Decomposition Technique to Logit and Probit Models By Fairlie, Robert

  1. By: Czajkowski, Mikołaj; Hanley, Nick; LaRiviere, Jacob
    Abstract: This paper develop and estimates a model of demand estimation for environmental public goods which allows for consumers to learn about their preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two environmental goods. We find that the predictions of the theoretical exercise that additional experience makes consumers more certain over their preferences in both mean and variance are supported in each case.
    Keywords: discrete choice experiment, preference learning, stated preferences, Bayesian updating, generalized multinomial logit, scale, scale variance,
    Date: 2013
  2. By: Moro, Mirko; Fischer, Anke; Milner-Gulland, EJ; Lowassa, Asanterabi; Naiman, Loiruck C; Hanley, Nick
    Abstract: Illegal hunting for bushmeat is regarded as an important cause of biodiversity decline in Africa. We use a stated preferences method to obtain information on determinants of demand for bushmeat in villages around the Serengeti National Park, Tanzania. We estimate the effects of changes in the own price of bushmeat and in the prices of two substitute protein sources – fish and chicken. Promoting the availability of protein substitutes at lower prices would be effective at reducing pressures on wildlife. Supply-side measures that raise the price of bushmeat would also be effective.
    Keywords: conservation, illegal bushmeat, stated preferences, open-ended choice experiments, price elasticity of demand, alternative protein sources, Tanzania,
    Date: 2014
  3. By: Hruschka, Harald
    Abstract: We investigate the application of two topic models, latent Dirichlet allocation (LDA) and the correlated topic model (CTM), to market basket analysis. Topic models measure the association between observed purchases and underlying latent activities of shoppers by conceiving each basket as random mixture of latent activities. We explain the structure of the two topic models used. We discuss estimation of LDA models by blocked Gibbs sampling. In addition we show how to evaluate the performance of topic models on estimation and holdout data. In the empirical study we analyse a total of 18,000 purchases made at a medium-sized supermarket which refer to 60 product categories. The LDA model performs better than the CTM in terms of log likelihood values. Latent activities inferred by this models are intuitive and interpretable, e.g., related to shopping of beverages or personal care, to baking or to an inclination towards luxury food. To illustrate the managerial relevance of estimated topic models we sketch the core of a recommender system which ranks purchase probabilities of other product categories conditional on the basket of a shopper.
    Keywords: multi-category buying behavior; market basket analysis; topic models
    JEL: L81 C35 C11
    Date: 2014–09–05
  4. By: Sabrina BRUYNEEL; Laurens CHERCHYE; Sam COSAERT; Bram DE ROCK; Siegfried DEWITTE
    Abstract: We propose a method to quantify the willingness-to-pay for the consumption of others in group decisions. Our method is based on revealed preference theory. It measures willingness-to-pay for others' consumption by evaluating positive consumption externalities in monetary terms. Within the framework of cooperative (i.e. Pareto efficient) consumption behavior, we introduce a selfishness parameter that defines a continuum of models that are characterized by varying degrees of consumption externalities. We use our method to analyze decisions made by dyads of children in an experimental consumption setting. We find that children's consumption decisions are systematically characterized by externalities (i.e. non-selfish). But we also observe that there is substantial heterogeneity across children, which we can relate to differences in age, gender and degree of friendship between dyad members.
    Date: 2014–07
  5. By: Elena Stancanelli (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Arthur Van Soest (Tilburg University - Netspar)
    Abstract: The economic litterature on retirement argues that individuals in a couple tend to retire at a choice time because of externalities in leisure. Ealier studies dit not investigate the extent to which partners actually spend more leisure time together upon retiring. Exploiting the law on early retirement age in France, we use a regression discontinuity approach to identify the causal effect of retirement on hours of leisure, separate and together, of the man and woman in a couple. We use a sample of couples drawn from a French Time Use Survey for the analysis. Using four different definitions of joint leisure, we conclude that generally both separate and joint leisure hours of partners increase significantly upon own retirement. In particular, the hours of leisure spent together by the couple increase on average by about an hour and a half per day upon wife's retirement and by less than an hour upon husband's retirement. The positive effect of partners' retirement on joint leisure is close in size to that on separate leisure or house work hours of partners.
    Keywords: Regression discontinuity; retirement, leisure
    Date: 2012–12
  6. By: Fairlie, Robert
    Abstract: The Blinder-Oaxaca decomposition technique is widely used to identify and quantify the separate contributions of group differences in measurable characteristics, such as education, experience, marital status, and geographical differences to racial and gender gaps in outcomes especially wage, earnings and other labor market outcomes. The technique cannot be used directly, however, if the outcome is binary and the coefficients are from a logit or probit model. I describe a relatively simple method of performing a decomposition that uses estimates from a logit or probit model. Expanding on the original application of the technique in Fairlie (1999), I provide a more thorough discussion of how to apply the technique, an analysis of the sensitivity of the decomposition estimates to different parameters, and the calculation of standard errors. I also compare the estimates to Blinder-Oaxaca decomposition estimates and discuss an example of when the Blinder-Oaxaca technique may be problematic. Applicaiton to computer ownership and entrepreneurship are used to illustrate the technique.  
    Keywords: Social and Behavioral Sciences, decomposition, race, inequality, computer, ICT, entrepreneurship, labor, education
    Date: 2014–09–12

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