nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒02‒22
ten papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Parents' Preferences for Enhanced Access in the Pediatric Medical Home: A Discrete Choice Experiment By Joseph S. Zickafoose; Lisa R. DeCamp; Lisa A. Prosser
  2. Response Time Patterns in a Stated Choice Experiment By Börjesson, Maria; Fosgerau, Mogens
  3. An empirical study of aggregation of alternatives and its influence on prediction: case study of car type choice in Sweden By Habibi, Shiva; Frejinger, Emma; Sundberg, Marcus
  4. Bundling incentives in markets with product complementarities: The case of triple-play By Macieira, João; Pereira, Pedro; Vareda, João
  5. Continuous Logit Polycentric City Model By Wrede, Matthias
  6. Is the income elasticity of the willingness to pay for pollution control constant? By Edward B. Barbier; Mikolaj Czajkowski; Nick Hanley
  7. A Monte Carlo analysis of alternative meta-analysis estimators in the presence of publication bias By Reed, W. Robert; Florax, Raymond J. G. M.; Poot, Jacques
  9. The determinants of voluntary carbon offsetting: A micro-econometric analysis of individuals from Germany and the United States By Ziegler, Andreas; Schwirplies, Claudia
  10. Jointness in Sites: The Case of Migratory Beekeeping By Luciano Pilati; Vasco Boatto

  1. By: Joseph S. Zickafoose; Lisa R. DeCamp; Lisa A. Prosser
    JEL: I
    Date: 2015–02–02
  2. By: Börjesson, Maria; Fosgerau, Mogens
    Abstract: This paper studies how response times vary between unlabeled binary choice occasions in a stated choice (SC) experiment, with alternatives differing with respect to in-vehicle travel time and travel cost. The pattern of response times is interpreted as an indicator of the cognitive processes employed by the respondents when making their choices. We find clear signs of reference-dependence in response times in the form of a strong gain-loss asymmetry. Moreover, different patterns of response times for travel time and travel cost indicate that these attributes are processed in different ways by respondents. This may be of particular relevance for choice experiments in the transportation field, where the travel time attribute is central.
    Keywords: Response Times; Stated Choice; Data collection; Value of time
    JEL: C83 D87 R41
    Date: 2015–02–09
  3. By: Habibi, Shiva (KTH); Frejinger, Emma (Université de Montréal); Sundberg, Marcus (KTH)
    Abstract: In the car type choice models, alternatives are usually grouped into categories by some of their main characteristics such as make, model, vintage, body type and/or fuel type. Each of these categories contains different versions of the cars that are usually not recognized in the applied literature. In this study we empirically investigate whether including the heterogeneity of these versions in the modeling do matter in estimation and prediction or not. We have detailed data on alternatives available on the market down to the versions level of each model which enables us to account for heterogeneity in the model. We also have Swedish car registry data as demand. We estimate different discrete choice models with different methods of correction for alternative aggregation including nesting structure. We estimate these models on based on year 2006 Swedish registry data for new cars, predict for 2007 and compare the results. The results show that including heterogeneity of cars' versions in the model improves model fitness but it does not necessarily improve prediction results.
    Keywords: Aggregate alternatives; Prediction; Car type choice; Discrete choice modeling; Clean vehicles
    JEL: R40
    Date: 2015–02–10
  4. By: Macieira, João; Pereira, Pedro; Vareda, João
    Abstract: We analyze …firms incentives to bundle and tie in the telecommunications industry. As a fi…rst step, we develop a discrete-choice demand model where fi…rms sell products that may combine several services in bundles, and consumers choose assortments of different types of products available from various vendors. Our approach extends standard discrete-choice demand models of differentiated product to allow for both flexible substitution patterns and to map demand for each choice alternative onto the demand for each service or bundle that a fi…rm may sell. We exploit these properties to examine bundling behavior when fi…rms choose: (i) prices, and (ii) which products to sell. Using consumer-level data and survey data from the Portuguese telecommunications industry, we estimate our demand model and identify fi…rm incentives to bundle and tie in this industry. We use the model to perform several policy related conterfactuals and evaluate their impact on prices and product provision.
    Keywords: Bundles,Discrete-Choice Model,Equilibrium Simulation,Differentiated Product,Consumer Level Data
    JEL: D43 K21 L44 L96
    Date: 2014
  5. By: Wrede, Matthias
    Abstract: This paper analyzes a closed linear polycentric city with homogenous households who probabilistically select their workplace and residence locations. The study utilizes a continuous logit model to describe household location choices. In contrast to the classic urban model with deterministic location choices, the continuous logit model predicts noticeable direct effects of more than one workplace on land rents, asymmetry of the land rent schedule around secondary business districts, incomplete segregation of citizens who work in different business centers and, therefore, cross commuting, and incomplete segregation of workers and farmers.
    JEL: R13 R14 R12
    Date: 2014
  6. By: Edward B. Barbier (Department of Economics & Finance, University of Wyoming, USA); Mikolaj Czajkowski (Department of Economic Sciences, University of Warsaw); Nick Hanley (Department of Geography and Sustainable Development, University of St. Andrews)
    Abstract: This paper explores both theoretically and empirically whether or not the willingness to pay (WTP) for pollution control varies with income. Our model indicates that the income elasticity of the marginal WTP for pollution reduction is only constant under very restrictive conditions, which are not necessary for an environmental Kuznets curve relationship between pollution and income. Our empirical analysis tests the null hypothesis that the elasticity of the WTP for pollution control with respect to income is constant, employing a multi-country contingent valuation study of eutrophication reduction in the Baltic Sea. Our findings reject this hypothesis, and estimate an income elasticity of the WTP for eutrophication control of 0.1-0.2 for low-income respondents and 0.6 - 0.7 for high-income respondents. Thus, our empirical results suggest that the elasticity is not constant and always less than one.
    Keywords: Baltic Sea, benefit transfer, environmental Kuznets curve, eutrophication, income elasticity of willingness to pay, non-market valuation.
    JEL: Q51 Q53 Q56
    Date: 2015–02
  7. By: Reed, W. Robert; Florax, Raymond J. G. M.; Poot, Jacques
    Abstract: This study uses Monte Carlo analysis to investigate the performances of five different meta-analysis (MA) estimators: the Fixed Effects (FE) estimator, the Weighted Least Squares (WLS) estimator, the Random Effects (RE) estimator, the Precision Effect Test (PET) estimator, and the Precision Effect Estimate with Standard Errors (PEESE) estimator. The authors consider two types of publication bias: publication bias directed against statistically insignificant estimates, and publication bias directed against wrong-signed estimates. Finally, the authors consider three cases concerning the distribution of the "true effect": the Fixed Effects case, where there is only one estimate per study, and all studies have the same true effect; the Random Effects case, where there is only one estimate per study, and there is heterogeneity in true effects across studies; and the Panel Random Effects case, where studies have multiple estimates, and true effects are random both across and within studies. The simulations produce a number of findings that challenge results from previous research.
    Keywords: meta-analysis,random effects,fixed effects,publication bias,Monte Carlo,simulations
    JEL: B41 C15 C18
    Date: 2015
  8. By: Aygul Ozbafli (JDINT’L, Department of Economics, Queen’s University, Canada); Glenn P. Jenkins (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus)
    Abstract: This research examines households’ willingness to pay (WTP) for an improved electricity service. Households’ WTP is estimated using the contingent valuation (CV) method on data from 350 in-person interviews in North Cyprus. In order to avoid the cost of outages, households are willing to incur a 13.5% increase in their monthly electricity bill. A cost–benefit analysis (CBA) indicates that the annualized economic benefits of improved reliability of the electricity service would be approximately USD 37.8 million for the residential sector alone. This figure is more than enough to finance the investments needed to completely eradicate any electricity outages. In addition, the fuel savings from substituting the generation of the new plants for the old plants would yield about USD 44.6 million per year in fuel savings. Hence, a change from the current low-reliability policy to one of providing a high-quality service would yield an economic net present value to the residents of North Cyprus of over 2.5 times the investment costs or USD 226 million within five years.
    Keywords: Willingness to pay; contingent valuation; electricity; outages; reliability; cost-benefit analysis
    JEL: D12 D61 L94 L98 Q41
    Date: 2015–02
  9. By: Ziegler, Andreas; Schwirplies, Claudia
    Abstract: This paper examines the determinants of voluntary individual carbon offsetting, i.e. the financial compensation of emissions from energy use. In contrast to former studies in this field, we particularly consider a comprehensive set of factors that are discussed in the context of voluntary contributions to public goods, such as psychological motives or social norms. The empirical analysis is based on unique data from representative surveys among more than 2000 citizens from Germany and the United States. These data reveal a higher extent of the past purchase of carbon offsets in the United States. In both countries, our micro-econometric analysis with discrete choice models indicates a strong positive correlation between the perceived contribution of this offsetting mechanism to climate protection and both actual carbon offsetting in the past and the planned purchase of carbon offsets in the future. In Germany, psychological motives such as the feeling of warm glow play an additional important role, while in the Unites States social motives such as expectations from the society are of a high relevance. Interestingly, a high environmental preference (measured by the membership in an environmental organization and the identification with green politics) is significantly correlated with already purchased carbon offsets in the United States, but not in Germany. These results suggest that not only the whole society in Germany has a lower average acceptance of carbon offsetting, but also that environmentally conscious people in this country obviously did not consider carbon offsetting as a measure to avoid further anthropogenic global warming so far.
    JEL: Q54 Q58 H41
    Date: 2014
  10. By: Luciano Pilati; Vasco Boatto
    Abstract: This paper formulates a bio-economic model that specifies the sequentiality of allocative choice on a migratory beekeeping farm in discrete form. It is assumed that the modeled farm operates in conditions of certainty and, allocating an apiary to forage sites, produces only two marketable outputs: commercial pollination service and honey. The biological connotation of this model is derived from the fact that the apiary outputs are specified as functions of the number of adult bees active on the pollinated sites. The bio-economic model determines revenues, variable costs, gross income and profits of a migratory beekeeping farm for each sequence of forage sites to be pollinated, i.e. for each practicable sitechronological regime. The bio-economic model allows the existence of jointness in sites to be tested, i.e. to ascertain if the sequential allocative choices are independent. The jointness in the forage sites can arise on the side of the revenues, on that of the variable costs or on both sides simultaneously. This bio-economic model formulated for migratory beekeeping farms is convertible to other farming activities involving transhumance, such as the grazing or rearing of livestock.
    Keywords: Migratory Beekeeping, Bio-economic Model, Sequential Discrete Choices, Sitechronological Regimes, Jointness in Sites.
    Date: 2014

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