nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒03‒22
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Stated Preferences for Consumption of Sea Urchin: A Choice Experiment in Sardinia (Italy) By Furesi, Roberto; Madau, Fabio A.; Palomba, Andrea; Pulina, Pietro
  2. Farmers’ Valuation of Incentives to Produce GMO-free Milk: A Discrete Choice Experiment By Schreiner, Julia A.
  3. What Clients Want; Choices between Lawyers' Offerings By Flóra Felsö; Sander Onderstal; Jo Seldeslachts
  4. Effects of Life Cycle Cost Information Disclosure on the Purchase Decision of Hybrid and Plug-In Vehicles By Dumortier, Jerome; Siddiki, Saba; Carley, Sanya; Cisney, Joshua; Krause, Rachel; Lane, Bradley; Rupp, John; Graham, John
  5. Estimating Demand for Turtle Conservation at the Rekawa Sanctuary in Sri Lanka By R. M. Wasantha Rathnayake

  1. By: Furesi, Roberto; Madau, Fabio A.; Palomba, Andrea; Pulina, Pietro
    Abstract: In Sardinia sea urchin (Paracentrotus lividus) roe is a basic ingredient for several dishes (e.g. pasta, pizza, croutons) and its demand is constantly increasing. However marketable value of local sea urchin appears to be potentially higher than the current value. This paper aims to estimate the value of a based sea urchin dish according to the stated preference of consumers. A Choice Experiment (CE) analysis on 475 consumers was carried out in order to estimate their willingness to pay (WTP) for consuming sea urchin. Seafood was proposed as alternative to sea urchin. CE regarded two attributes: certification of local origin and place where dishes are consumed. Findings suggest that WTP for a generic dish is significantly higher for sea urchin (11.65 Euros) than for seafood (7.94 Euros) based dish. Furthermore, we found that WTP is higher when both foods are consumed with spaghetti and as raw fresh product, whereas an opposite effect is associated to pizza. Finally, the influence of some socio-economic characteristics of responders on their preferences was estimated.
    Keywords: Choice experiment, sea urchin demand, stated preferences, Agribusiness, Food Consumption/Nutrition/Food Safety, D12 Q13 Q22,
    Date: 2014–10
  2. By: Schreiner, Julia A.
    Abstract: This paper investigates farmers’ willingness to adopt a Genetically Modified Organisms (GMO)-free milk production scheme introduced by the dairy. Incentives like a price premium, advice, quality control and feed procurement are set to encourage the conversion. The analysis is based upon Discrete Choice Experiments with 151 dairy farmers in Germany. Alternative-specific conditional logit estimation reveals the marginal effects of incentives and the amount of compensation. The results indicate that attributes like the price premium, takeover of feed procurement and an external audit affect the likelihood of adoption. Farmer, farm characteristics and attitudes concerning GMO as well as expectations on feed prices were found to be significant determinants of adoption. Moreover the findings demonstrate variation in the values of attributes across regions.
    Keywords: GMO-free milk production, choice experiments, incentive instruments, Agribusiness, Food Consumption/Nutrition/Food Safety, Production Economics,
    Date: 2014–10
  3. By: Flóra Felsö; Sander Onderstal; Jo Seldeslachts
    Abstract: We analyze a client's choice of contract in auctions where Dutch law firms compete for cases. The distinguishing feature is that lawyers may submit bids with any fee arrangement they prefer: an hourly rate, a fixed fee or a \mixed fee," which is a time-capped fixed fee plus an hourly rate for any additional hours should the case take longer than expected. This format of selling legal services is unusual in that it both forces lawyers to compete directly against each other and allows clients to easily compare these different offers. We estimate a choice model for clients and find robust evidence that hourly rate bids are a client's least-preferred choice. Our findings tentatively contradict lawyers' often made argument that hourly rates are in a client's best interest.
    Keywords: Lawyers' fee arrangements, clients' choices, discrete choice models
    JEL: C25 D43 K10 K40
    Date: 2015
  4. By: Dumortier, Jerome; Siddiki, Saba; Carley, Sanya; Cisney, Joshua; Krause, Rachel; Lane, Bradley; Rupp, John; Graham, John
    Abstract: Energy-saving technologies have a difficult time being widely accepted and consumed in the marketplace when they have a high initial purchase price and deferred financial benefits. Consumers might not realize that, in the long-run, the financial benefits from reduced energy consumption offset much or all of the initial price premium. One strategy to address consumer misconception of this advantage is to supply information on the "total cost of ownership," a metric which accounts for the purchase price, the cost of the fuel, and other costs over the ownership period. In this article, we investigate how providing information on five-year fuel cost savings and total cost of ownership affects the stated preferences of consumers to purchase a gasoline, hybrid, plug-in hybrid, or battery electric vehicle. Through an online survey with an embedded experimental design using two distinct labels, we find that respondent rankings of vehicles are unaffected by information on five-year fuel cost savings only. However, adding information about total cost of ownership increases the probability that small/mid-sized car consumers express a preference to acquire a hybrid, plugin hybrid, or a battery-electric vehicle. No such effect is found for consumers of small sport utility vehicles. Our results are consistent with other findings in similar behavioral economics investigations on this topic and suggest that further evaluation of the effects of providing consumers with information on the total cost of ownership is warranted.
    Keywords: Rank-ordered logit, battery electric vehicles, life cycle cost, label information, Environmental Economics and Policy, Institutional and Behavioral Economics,
    Date: 2015
  5. By: R. M. Wasantha Rathnayake
    Abstract: Turtles at the Rekawa sanctuary in Sri Lanka are under threat due to ongoing illegal activities such as killing turtles for meat, egg collection for sale, and the use of turtle shells to make products for markets. This study estimates the entrance fee that can be charged to visitors for ‘turtle watching' to ascertain whether revenues from such fees can be used to compensate fishermen and reduce such illegal activities. We carried out a contingent valuation study at the Rekawa sanctuary and Bundala and Yala national parks to examine the foreign and local visitors' willingness to pay (WTP) for turtle conservation under two different management scenarios. Scenario 1 sought to ascertain visitor preferences if visitor services were improved, while Scenario 2 focused on both visitor services and potential conservation initiatives. The findings suggest that a majority (63%) of visitors are willing to pay an entrance fee, which can be used for protecting turtles and improving visitor facilities at Rekawa. The estimated mean WTP per visit for local visitors was LKR 93 (USD 0.73) and LKR 143 (USD 1.12) for Scenarios 1 and 2, respectively, while the mean WTP of foreign visitors was USD 15 and USD 19 for Scenarios 1 and 2, respectively. Further, if we implement scenarios 1 and 2, annual revenue would increase by LKR 70 million and LKR 50 million respectively. These results, which suggest potentially huge gains in revenue, can be used to re-design entry fees for the Rekawa sanctuary and secure the cooperation of low income fishermen in turtle conservation.
    Keywords: Turtles, Willingness to pay, Revenue changes, Turtle watching, Conservation, Rekawa, Sri Lanka

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