nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2014‒12‒08
fourteen papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. The Value of Policies to Conserve Native Bees in Northern Thailand-A Discrete Choice Experiment By Narjes, Manuel; Lippert, Christian
  2. Preference Tradeoffs Across Spatial Scales: Developing a Micro Level Sorting Model By Livy, Mitchell R.; Klaiber, H. Allen
  3. Preferences for Sustainable Lawn Care Practices: The Choice of Lawn Fertilizers By Khachatryan, Hayk; Zhou, Guzhen
  4. Estimation of Dynamic Discrete Choice Models by Maximum Likelihood and the Simulated Method of Moments By Eisenhauer, Philipp; Heckman, James J.; Mosso, Stefano
  5. Do environmental concerns affect commuting choices? Hybrid choice modelling with household survey data. By Jennifer Roberts; Gurleen Popli; Rosemary J. Harris
  6. What’s your game? Heterogeneity amongst New Zealand hunters By Kerr, Geoffrey N; Abell, Walter
  7. Are Food Exchange Websites the Next Big Thing in Food Marketing? A Latent Class Analysis. By Vassalos, Michael; Lim, Kar Ho
  8. Introducing and contrasting “revealed” ANA data collection approach vs “stated” and “inferred” approaches for choice experiments for NZ water valuation in irrigated dairy farms By Kravenchenko, Alex
  9. Consumer Acceptance and Willingness to Pay for Genetically Modified Rice in China By Jin, Jing; Wailes, Eric; Dixon, Bruce; Nayga, Rodolfo M. Jr.; Zheng, Zhihao
  10. The Influence of Unit Pricing on Snack Food Choices By Cash, Sean B.; McAlister, Anna R.; Lou, Chen
  11. Effects of Marginal Speci cations on Copula Estimation By Azam, Kazim
  12. Technology, Ecology and Agricultural Trade By Heerman, Kari E.R.
  13. Financial Services and Divisible Technology Dis-adoption among Farm Households: Theory and Empirical Application Using Data from Ethiopia By Guizar-Mateos, Isai; Dadzie, Nicholas
  14. The appeals process: An empirical assessment By Hüschelrath, Kai; Smuda, Florian

  1. By: Narjes, Manuel; Lippert, Christian
    Abstract: This article is an attempt to estimate the economic value of policies aimed at conserving native bees (and their pollination services) in Northern Thailand, by means of a discrete choice experiment. The preferences of 198 longan (Dimocarpus longan) farmers for three conservation strategies in particular, namely “bee-friendly pest management”, “improving native bee habitats within agro-forest ecosystems” and “fostering the husbandry of native bee species”, were analyzed. Thereby, the part-worth utilities of these strategies and of their potential effects on the population of native bees were estimated with conditional logit and random parameter logit models. Furthermore, the contribution of a “cost” attribute to the explanation of the utility associated with the choice alternatives allowed the calculation of willingness to pay estimates for the individual conservation strategies and for changes in the population of native bees. As a result, a positive contribution of the proposed conservation measures to the utility derived from the choice alternatives containing them could be established. Similarly, positive changes in the population of native bees also increased the chances of related conservation policy profiles being chosen. It can be concluded that the population of longan farmers is generally willing to pay for the conservation of native bees in their region, although explaining their preference heterogeneity for the proposed conservation measures will require further analyses.
    Keywords: Native Bee Conservation, Crop Pollination, Northern Thailand, Discrete Choice Experiment, Conditional Logit, Random Parameter Logit., Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Risk and Uncertainty,
    Date: 2014–09
  2. By: Livy, Mitchell R.; Klaiber, H. Allen
    Abstract: This paper investigates the role of spatial scale in residential location choice. While the current residential sorting literature has largely focused on a single spatial unit, we expect that homeowners face different tradeoffs across the spatial spectrum, and that these tradeoffs interact across space in different ways to shape observed outcomes. To investigate these phenomena, we implement a nested logit discrete choice model of residential household sorting. With this model, we examine residential location choice at the school attendance boundary and residential neighborhood levels, and we find that the influence of environmental amenities on the location choice of households is complex, often having different implications depending on spatial scale.
    Keywords: location choice, nested logit, environmental amenities, Environmental Economics and Policy, Research Methods/ Statistical Methods, Q50, Q51, Q57, R14, R21,
    Date: 2014
  3. By: Khachatryan, Hayk; Zhou, Guzhen
    Abstract: Urban sprawl in the U.S. has substantially increased the area of maintained residential landscapes. While there are social and economic benefits associated with well-maintained residential lawns, improper landscaping practices, such as excessive irrigation and fertilization may result in adverse environmental effects such as fertilizer chemicals runoff into water resources. Previous studies investigated homeowners’ landscaping practices such as amount and frequency of irrigation or fertilizing. However, preferences and willingness to pay (WTP) for eco-friendly fertilizer attributes, which would benefit marketers, educators, and local governments in fertilizers regulation related decision making, remains largely unexplored. This study utilized a discrete choice experiment to investigate whether and how the presence of ecofriendly attributes influence consumers’ preferences and WTP for lawn fertilizers. Results from the mixed logit model showed that homeowners were willing to pay price premiums for products featured with environmentally-sustainable attributes (i.e., controlled-release nitrogen, phosphorus-free, and natural and/or organic). It was also found that the experiment participants preferred lawn fertilizers that were labeled as pet-friendly and those that included pest control feature. Relevant policy and marketing implications are discussed.
    Keywords: lawn care, eco-friendly, organic, controlled-release, nitrogen fertilizer, choice experiment, willingness to pay, Crop Production/Industries, Environmental Economics and Policy, Q53, Q56, D12,
    Date: 2014
  4. By: Eisenhauer, Philipp (University of Chicago); Heckman, James J. (University of Chicago); Mosso, Stefano (University of Chicago)
    Abstract: We compare the performance of maximum likelihood (ML) and simulated method of moments (SMM) estimation for dynamic discrete choice models. We construct and estimate a simplified dynamic structural model of education that captures some basic features of educational choices in the United States in the 1980s and early 1990s. We use estimates from our model to simulate a synthetic dataset and assess the ability of ML and SMM to recover the model parameters on this sample. We investigate the performance of alternative tuning parameters for SMM.
    Keywords: returns to education, dynamic discrete choice, simulation-based estimation
    JEL: C13 C15 C35 I21
    Date: 2014–10
  5. By: Jennifer Roberts (University of Sheffield); Gurleen Popli (University of Leicester); Rosemary J. Harris (Queen Mary University of London)
    Abstract: In order to meet their ambitious climate change goals governments around the world will need to encourage behaviour change as well as technological progress; and in particular they need to weaken our attachment to the private car. A prerequisite to designing effective policy is a thorough understanding of the factors that drive behaviours and decisions. In an effort to better understand how the public’s environmental attitudes affect their behaviours we estimate a hybrid choice model (HCM) for commuting mode choice using a large household survey data set. HCMs combine traditional discrete choice models with a structural equation model to integrate latent variables, such as attitudes and other psychological constructs, into the choice process. To date HCMs have been estimated on small bespoke data sets, beset with problems of sample selection, focusing effects and limited generalizability. To overcome these problems we demonstrate the feasibility of using this valuable modelling approach with nationally representative data. Our estimates suggest that environmental attitudes and behaviours are separable constructs, and both have an important influence on commute mode choice. These psychological factors can be exploited by governments looking to add to their climate change policy toolbox in an effort to change travel behaviours.
    Keywords: hybrid choice model, structural equation modelling, environment
    JEL: C38 Q50 R41
    Date: 2014–11
  6. By: Kerr, Geoffrey N; Abell, Walter
    Abstract: The introduction of the New Zealand Game Animal Council in 2014 heralds a new era for New Zealand big game management. Now that management of game animals to enhance benefits from sustained use is possible, it is important to understand who values game resources and the attributes that enhance benefits from their use. Choice experiments using a pivot design around actual travel distance identified salience of hunt-related attributes for recreational hunters of Himalayan tahr (Jemlahicus Hemitragus) and sika deer (Cervus Nippon). The choice experiments successfully used travel distance as the numeraire of value to overcome resistance to the commodification of hunting. Results show the high value of recreational hunting, and identify disparate preferences both within and between species. Understanding heterogeneity offers important insights into managing hunting experiences to enhance their value for recreational hunters.
    Keywords: Choice experiment, sika deer, Himalayan tahr, recreation, hunting, management, heterogeneity, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies,
    Date: 2014
  7. By: Vassalos, Michael; Lim, Kar Ho
    Abstract: A Latent Class model is utilized to examine vegetable and livestock producers’ preferences for a number of different features offered by food exchange websites. The results indicate that growers are willing to pay on average $55.69 per month if an online marketplace is offered. Additionally, the WTP for advertising on FacebookSocial media is on average $20.43 per month. Lastly, the producers are willing to pay $31.37 per month more for the service if it is provided by a private for profit company.
    Keywords: E-Commerce, Online Food Exchange, Marketing, Local Food, Choice Experiment, Agribusiness, Marketing, Research and Development/Tech Change/Emerging Technologies, Q13, Q18,
    Date: 2014–05–28
  8. By: Kravenchenko, Alex
    Keywords: Agribusiness, Research and Development/Tech Change/Emerging Technologies,
    Date: 2014–08
  9. By: Jin, Jing; Wailes, Eric; Dixon, Bruce; Nayga, Rodolfo M. Jr.; Zheng, Zhihao
    Abstract: Over the past decade public perception of GM food in China has become increasingly contentious. Concerns have emerged with regard to public health, environmental safety, and economic impacts. This paper utilizes a survey conducted in 2013 to evaluate China’s urban consumers’ acceptance and willingness to pay (WTP) for genetically modified rice. The survey was conducted in thirteen of the main rice consuming provinces of China. Responses from 994 consumers are used to estimate WTP for GM rice relative to non-GM rice. A double bounded dichotomous choice contingent valuation method is used to estimate consumers’ WTP for GM rice products. The effect of socio-demographic characteristics of consumers on acceptance and WTP is also reported. The survey design includes different information treatments for GM rice: no specific rice trait information, environmental/producer trait information (Bt rice), consumer health trait information (Golden rice) and stacked environmental/producer plus consumer health traits information. For the three specific rice trait information treatments, the risks and benefits information were reordered for the half of the respondents. The main result of the study is that a majority of Chinese urban consumers require a large discount to be willing to pay for GM rice regardless of rice trait and information treatment. Compared to previous studies, Chinese consumers’ WTP and attitudes on GM rice have become more negative.
    Keywords: GM rice, China urban consumers, willingness to pay, double bounded dichotomous choice model, Food Consumption/Nutrition/Food Safety, Marketing, D12,
    Date: 2014
  10. By: Cash, Sean B.; McAlister, Anna R.; Lou, Chen
    Keywords: choice experiments, price presentation, unit pricing, snack food choice., Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics,
    Date: 2014
  11. By: Azam, Kazim (Vrije Universiteit, Amsterdam)
    Abstract: This paper studies the effect of marginal distributions on a copula, in the case of mixed discrete-continuous random variables. The existing literature has proposed various methods to deal with mixed marginals: this paper is the rst to quantify their e ect in a uni ed Bayesian setting. Using order statistics based information for the marginals, as proposed by Ho (2007), we find that in small samples the bias and mean square error are at least half in size as compared to those of empirical or misspecified marginal distributions. The difference in the bias and mean square error enlarges with increasing sample size, especially for low count discrete variables. We employ the order statistics method on firm-level patents data, containing both discrete and continuous random variables, and consistently estimate their correlation. Key words: Bayesian copula ; discrete data ; order statistics ; semi-parametric JEL classification: C11 ; C14 ; C52
    Date: 2014
  12. By: Heerman, Kari E.R.
    Abstract: I introduce a novel general equilibrium framework for agricultural trade policy analysis with heterogeneous producers in which agro-ecological characteristics in uence patterns of specialization within the sector and trade costs are product-specific. This induces substantial variation in market share elasticities with respect to trade costs, with the largest magnitude elasticities between countries most likely to compete head-to-head in the same products. The model is thus able to generate more nuanced predictions for how bilateral agricultural trade and production patterns shift in response to changes in policy than existing models. I draw on techniques pioneered in the discrete choice literature to estimate parameters that describe the distribution of productivity and trade costs across products. This approach has the considerable advantage of allowing me to solve a product-level conceptual model with little data beyond what is used in a standard gravity model. This framework promises to allow researchers to make more informed predictions for how global agricultural trade and production patterns shift in response to policy change.
    Keywords: Agricultural Trade, Gravity, Trade Costs, Discrete Choice, Productivity, Comparative Advantage, Agricultural and Food Policy, International Relations/Trade, Research Methods/ Statistical Methods,
    Date: 2014
  13. By: Guizar-Mateos, Isai; Dadzie, Nicholas
    Abstract: The adoption of improved varieties and technologies by rural agricultural households remains a major goal in development efforts. This is because researchers and development practitioners recognize it as a potential source of income growth for the poor. However, while studies on adoption of improved technologies abound, little evidence exist on the continued use of improved technologies. This study addresses this gap by focusing on divisible technologies which do not require significantly high investments or capital. A dynamic stochastic model is formulated which analyzes the mechanics of adoption and abandonment of improved technology among poor households. The model is solved using numerical approximation methods for different regimes of financial intermediation. The results show that increasing credit limits helps in sustained adoption and prevents abandonment of high-income crop. Using discrete choice panel data models, we test the implications of our theoretical results with data from rural Ethiopia. The estimation results confirm that for households already engaged in high income crops like maize, access to credit prevents abandonment of the maize crop.
    Keywords: financial services, credit, abandonment, rural Ethiopia, Agricultural and Food Policy, Food Security and Poverty, International Development, Risk and Uncertainty,
    Date: 2014
  14. By: Hüschelrath, Kai; Smuda, Florian
    Abstract: The appeals process - whereby the losing party of an administrative or judicial decision can seek reconsideration of their arguments before a higher institution - is an important mechanism to correct legal errors and to improve existing laws and regulations. We use data of 467 firm groups that participated in 88 cartels convicted by the European Commission between 2000 and 2012 to study both the characteristics of firm groups filing an appeal and the factors that determine their successfulness in terms of fine reduction. Applying discrete choice models and a two-stage hurdle model, we find that while some characteristics - such as the size and financial condition of the firm group or the clarity of fine guidelines - only affect the probability to file an appeal, other factors such as the size of the fine imposed in connection to characteristics as ringleader, repeat offender or leniency applicant influence both the probability and the success of an appeal. We take our empirical results to derive conclusions for both firms and public policy makers.
    Keywords: Law and Economics,appeals,antitrust policy,cartels,European Union
    JEL: K21 K41 K42 L41
    Date: 2014

This nep-dcm issue is ©2014 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.
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