nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2014‒10‒17
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Discrete choice estimation of time preferences By Jose Apesteguia; Miguel A. Ballester
  2. Within- and between- sample tests of preference stability and willingness to pay for forest management By Mikołaj Czajkowski; Anna Bartczak; Wiktor Budziński; Marek Giergiczny
  3. Determinants of Households' Investment in Energy Efficiency and Renewables: Evidence from the OECD Survey on Household Environmental Behaviour and Attitudes By Nadia Ameli; Nicola Brandt
  4. Moment-based estimation of nonlinear regression models with boundary outcomes and endogeneity, with applications to nonnegative and fractional responses By Esmeralda A. Ramalho; Joaquim J.S. Ramalho
  5. Transaction Partners and Firm Relocation Choice: Evidence from the Tohoku Earthquake By Ono, Arito; Miyakawa, Daisuke; Hosono, Kaoru; Uchida, Hirofumi; Uchino, Taisuke; Uesugi, Iichiro
  6. Estimation of households’ preferences for reforms in employee public pension plan in Japan(in Japanese) By Tomoki KITAMURA; Kunio NAKASHIMA

  1. By: Jose Apesteguia; Miguel A. Ballester
    Abstract: Discrete choice methods are often used for the estimation of time preferences. We show that these methods have pervasive problems when based on random utility models, for which cases our results establish that the probability of selecting a later option over an earlier one may be greater for higher levels of impatience. This could have profound implications, not only in the experimental estimation of time preferences, but also in a wide variety of empirical papers using such models in dynamic settings. Alternatively, we also show that discrete choice methods built on random preference models are always free of all such problems.
    Keywords: Discrete Choice; Structural Estimation; Time; Discounting; Random Utility Models; Random Preference Models.
    JEL: C25 D90
    Date: 2014–08
  2. By: Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Anna Bartczak (Faculty of Economic Sciences, University of Warsaw; Warsaw Ecological Economics Center); Wiktor Budziński (Faculty of Economic Sciences, University of Warsaw); Marek Giergiczny (Faculty of Economic Sciences, University of Warsaw; Warsaw Ecological Economics Center)
    Abstract: The assumption of the stability of preferences is a fundamental one in the theory of the consumer. Many papers within the stated preferences literature have tested this assumption, and have found mixed results. Individuals may become more sure of their preferences as they repeat a valuation task or purchase decision; they may also learn more about prices and quantities of substitutes or complements over time, or about other relevant characteristics of both the good being valued and alternatives in their choice sets. In this paper, we test for the stability of preferences and willingness to pay for attributes of forest management both within and between samples. The within-sample test compares a set of responses from individuals over the sequence of a survey; the between-sample test compares responses from the same people over a period of 6 months. We find that respondents’ preferences differ more within a sample (comparing their first 12 with their second 12 choices) than across samples. This may imply that preference learning and/or fatigue effects within choice experiments are more important than changes in preferences over time in this data.
    Keywords: preference stability, test-retest, discrete choice experiments, contingent valuation, stated preferences, forestry
    JEL: D01 H4 Q23 Q51
    Date: 2014
  3. By: Nadia Ameli; Nicola Brandt
    Abstract: Many studies on household energy efficiency investments suggest that a wide range of seemingly profitable investments are not taken up. This paper provides novel evidence on the main factors behind consumer choices using the OECD Survey on Household Environmental Behaviour and Attitudes. The empirical analysis is based on the estimation of binary logit regression models. Empirical results suggest that households’ propensity to invest in clean energy technologies depends mainly on home ownership, income, social context and households’ information. Indeed, home owners and high-income households are more likely to invest than renters and low-income households. On the other hand, social context, such as membership in an environmental non-governmental organisation, and households’ knowledge about their energy spending and use may play a relevant role in technology adoption. Les déterminants de l'investissement des ménages dans l'efficacité énergétique et les énergies renouvelables : Résultat de l'enquête de l'OCDE sur les comportements et attitudes des ménages face aux questions d'environnement De nombreuses études sur les investissements des ménages en matière d'efficacité énergétique suggèrent qu'une large gamme d'investissements apparemment rentables n’est pas exploitée. Cette étude fournit de nouveaux éléments de preuve sur les principaux facteurs qui expliquent les choix des consommateurs à l'aide de l'Enquête de l'OCDE sur les comportements et les attitudes des ménages avec l’environnement. L'analyse empirique est basée sur l'estimation des modèles de régression logit binaires. Les résultats empiriques suggèrent que la propension des ménages à investir dans les technologies d'énergie propre dépend principalement de la propriété, du revenu, du contexte social et de l'information sur le sujet qu’obtiennent les ménages. En effet, les propriétaires de maison et les ménages à revenu élevé sont plus susceptibles d'investir que les locataires et les ménages à faible revenu. D'autre part, le contexte social, tels que l'appartenance à une organisation non gouvernementale pour la protection de l'environnement, la connaissance des ménages sur leurs dépenses d'énergie et l'utilisation peut jouer un rôle important dans l'adoption de la nouvelle technologie.
    Keywords: energy efficiency, technology adoption, consumer behaviour, discrete choice, choix discret, efficacité énergétique, adoption de la technologie, comportement des consommateurs
    JEL: D12 O33 Q20 Q40 Q56 R22
    Date: 2014–09–24
  4. By: Esmeralda A. Ramalho (Department of Economics and CEFAGE-UE, Universidade de Evora); Joaquim J.S. Ramalho (Department of Economics and CEFAGE-UE, Universidade de Evora)
    Abstract: In this paper we suggest simple moment-based estimators to deal with unobserved heterogeneity in a special class of nonlinear regression models that includes as main particular cases exponential models for nonnegative responses and logit and complementary loglog models for fractional responses. The proposed estimators: (i) treat observed and omitted covariates in a similar manner; (ii) can deal with boundary outcomes; (iii) accommodate endogenous explanatory variables without requiring knowledge on the reduced form model, although such information may be easily incorporated in the estimation process; (iv) do not require distributional assumptions on the unobservables, a conditional mean assumption being enough for consistent estimation of the structural parameters; and (v) under the additional assumption that the dependence between observables and unobservables is restricted to the conditional mean, produce consistent estimators of partial effects conditional only on observables.
    Keywords: Unobserved heterogeneity; Endogeneity; Boundary outcomes; Fractional regression; Exponential regression; Transformation regression models.
    JEL: C25 C51 C26
    Date: 2014
  5. By: Ono, Arito; Miyakawa, Daisuke; Hosono, Kaoru; Uchida, Hirofumi; Uchino, Taisuke; Uesugi, Iichiro
    Abstract: A firm’s choice of location is very important because it reveals the firm’s dynamics. Using a unique firm-level data set, we examine whether and how the presence of incumbent transaction partners (i.e., suppliers, customers, and lender banks) affects this choice. To this end, we focus on those firms that were forced to relocate their headquarters because of the severe damage inflicted by the Tohoku Earthquake. We find that after the earthquake, firms tended to move to areas where their customers were located, but not to areas where their suppliers were located. We also find that firms tended to move to areas where the bank branches that they had transacted with were located. Further, we find that the sizable impact of the presence of incumbent customers and banks on the probability of the firms’ relocations diminished if the customers and the bank branches were also damaged by the earthquake. On balance, these results suggest that the presence of healthy transaction partners is an important factor in the firms’ choice of location.
    Keywords: relocation choice, agglomeration, transaction partners, Tohoku Earthquake
    JEL: R30 L14 G20
    Date: 2014–09
  6. By: Tomoki KITAMURA; Kunio NAKASHIMA
    Abstract: We investigated households’ preferences for reforms in employee public pension plan in Japan using a choice experiment. We considered five policy approaches: increasing contribution rate, decreasing pension benefit, increasing pension age, increasing the variation in pension benefit by allowing more equity investments, and increasing consumption tax. We found that households required an increase (1) of JPY 19,810 in the monthly pension benefit for accepting a one-year increase in pension age; (2) of JPY 4,510 for a 1% increase in contribution rate; and (3) of JPY 3,530 for a 1% increase in consumption tax. These results indicate that among the above policy approaches, an increase in pension age is the most unpopular. An increase in consumer tax is preferred over an increase in contribution rate. In addition, households are willing to lower the monthly benefit by JPY 2,270 for a 1% increase in risk of benefit. This indicates that households are willing to increase investment risk—such as by allowing more equity investments—to avoid immediate increases in contribution rate and consumption tax. As for the difference between the participants’ and beneficiaries’ preferences, we found that while participants required an increase of JPY 5,630 in the monthly benefit for accepting a 1% increase in consumption tax, beneficiaries showed no preference. This indicates that beneficiaries are tolerant of increased consumption tax.
    Date: 2013–06

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