nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒05‒16
nine papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Evaluation of consumers' lifestyles and willingness to pay for dates: A hybrid choice model approach By Abdelradi, Fadi; Abdu, Khaled
  2. On the Extent to which the Presence of Intermediate-stop(s) Air Travel Products Influences the Pricing of Nonstop Air Travel Products By Gayle, Philip; Wu, Chi-Yin
  3. What Factors Affect Doctors’ Hours Decisions: Comparing Structural Discrete Choice and Reduced-Form Approaches By Guyonne Kalb; Daniel Kuehnle; Anthony Scott; Terence Chai Cheng; Sung-Hee Jeon
  4. Estimating Farmers' Willingness to Change Tillage Practices to Supply Carbon Emissions Offsets By Gramig, Benjamin M.; Widmar, Nicole J.O.
  5. Virtual Reality and Scope Sensitivity in a Choice Experiment About Coastal Erosion By Phillips, Yvonne; Marsh, Dan
  6. The UK public’s perceptions on the issue of the dog overpopulation problem and people’s willingness to pay (WTP) for a humane stray dog management. By Siettou, Christina
  7. Evaluating consumers' sustainable choice of wine: A virtual shop experiment By Bazoche, Pascale; Issanchou, Sylvie; Brouard, Joëlle; Maratray, Jacques; Ginon, Emilie
  8. On the economic theory of crop rotations: value of the crop rotation effects and implications on acreage choice modeling By Alain Carpentier; Alexandre Gohin
  9. Interval-valued Time Series Models: Estimation based on Order Statistics. Exploring the Agriculture Marketing Service Data By Gloria Gonzalez-Rivera; Wei Lin

  1. By: Abdelradi, Fadi; Abdu, Khaled
    Keywords: Consumer/Household Economics, Demand and Price Analysis,
    Date: 2015–03
  2. By: Gayle, Philip; Wu, Chi-Yin
    Abstract: Analysts of air travel markets, which include antitrust authorities, are interested in understanding the extent to which the presence of intermediate stop(s) products influences the pricing of nonstop products. This paper uses a structural econometric model to investigate the potential pricing interdependence between these two product types in domestic air travel markets. Counterfactual experiments using the estimated model suggest that in many (but far from a majority) markets the current prices of nonstop products are at least 5% lower than they would otherwise be owing to the presence of intermediate-stop(s) products.
    Keywords: Substitutability and Pricing Interdependence between Differentiated Air Travel Products; Discrete Choice Demand Model; Random Coefficients Logit
    JEL: L13 L40 L93
    Date: 2015–05–05
  3. By: Guyonne Kalb (Melbourne Institute of Applied Economic and Social Research, University of Melbourne); Daniel Kuehnle (University of Erlangen-Nuremberg); Anthony Scott (Melbourne Institute of Applied Economic and Social Research, University of Melbourne); Terence Chai Cheng (School of Economics, The University of Adelaide); Sung-Hee Jeon (Statistics Canada)
    Abstract: Few papers examine the pecuniary and non-pecuniary determinants of doctors’ labour supply despite substantial predicted shortages in many OECD countries. We contribute to the literature by applying both a structural discrete choice and a reduced-form approach. Using detailed survey data for Australian physicians, we examine how these different modelling approaches affect estimated wage elasticities at the intensive margin. We show that all modelling approaches predict small negative wage elasticities for male and female General Practitioners (GPs) and specialists. Our detailed subgroup analysis does not reveal particularly strong responses to wage increases by any specific group. We show that the translog and Box-Cox utility functions outperform the quadratic utility function. Exploiting the advantages of the structural discrete choice model, we examine short-term effects at the intensive margin by calculating labour supply changes in response to 5 and 10% wage increases. The results show that such wage increases substantially reduce the full-time equivalent supply of male GPs, and to a lesser extent of male specialists and female GPs, but not of female specialists.
    Keywords: Labour supply, discrete choice model, wage elasticity, health workforce, MABEL
    JEL: I11 J22 J44 J21
    Date: 2015–04
  4. By: Gramig, Benjamin M.; Widmar, Nicole J.O.
    Abstract: One common element in many voluntary and regulatory carbon markets to date has been the inclusion of emissions offsets that can be sold by entities outside of emission caps. A particularly low cost means of sequestering atmospheric carbon is reducing tillage of agricultural soils. A choice experiment is conducted with corn and soybean farmers in Indiana, USA to measure farmers' willingness to change tillage practices to supply carbon offsets by estimating their willingness to accept (WTA) payment related to different attributes of active and proposed carbon markets. This research is unique in its focus on the supply side of the market for environmental services, and contributes to the nascent literature on the valuation of the ‘means’ of achieving an improvement in environmental quality, rather than the environmental ‘end’ result of a proposed policy or market. Understanding farmers' preferences and willingness to adjust practices is vital to designing schemes that farmers will participate in so that global carbon abatement efforts can be achieved in the most cost-effective ways possible. We investigate attribute non-attendance (ANA) in our sample, estimate and compare WTA amongst adopters and non-adopters of no-till, and compare WTA with current carbon prices to evaluate the prospects for increased adoption.
    Keywords: offsets, tillage, choice experiment, attribute non-attendance, climate change, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, Q12, Q24, Q51, Q54,
    Date: 2015–04
  5. By: Phillips, Yvonne; Marsh, Dan
    Keywords: Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession,
    Date: 2015–02
  6. By: Siettou, Christina
    Abstract: The present study surveyed a UK representative sample of 500 individuals and employed the Choice Experiment (CE) to elicit the UK public’s views on the management of stray dogs and people’s willingness to pay (WTP) to reduce the current euthanasia rate. The results revealed that people have an emotional bonding with companion animals and are willing to pay to reduce the current euthanasia rate. According to the findings the UK public believes that the current stray dog management of euthanizing unhomed dogs is of grave or moderate concern and appears to be keen on the imposition of welfare-improving policies such as dog licensing, compulsory micro-chipping, etc. In addition, the CE investigated people’s willingness to pay (WTP) on a monthly basis to extend the current stray dog seven day statutory period in order to reduce the euthanasia rate. By constructing two payment methods, those of a Voluntary Contribution and of a Mandatory Council Tax Charge the study revealed that people are willing to pay £5.83 per month for small cross/mixed breed dog under the Voluntary Contribution regime and £2.14 per month for a young dog under the Mandatory Council Tax Charge regime.
    Keywords: Animal Welfare, Choice Experiment, Agribusiness, Q00, Q19,
    Date: 2015–04
  7. By: Bazoche, Pascale; Issanchou, Sylvie; Brouard, Joëlle; Maratray, Jacques; Ginon, Emilie
    Keywords: Consumer/Household Economics, Crop Production/Industries,
    Date: 2015–03
  8. By: Alain Carpentier; Alexandre Gohin
    Abstract: Crop rotations are known to have two main kinds of economic effects: direct effects on potential yields and on the productivity of different inputs, and indirect effects on economically optimal input levels, especially pesticides and fertilizers. The main objective of this article is to uncover the mechanisms through which crop rotation effects affect the acreage choices of forward-looking farmers, in a dynamic programming framework. Whereas most models considering acreage choices with crop rotation effects are based on discrete choice models at the plot level, our model considers a farm level strategy. This implies that our theoretical modeling framework is closely related to the models commonly used for empirically investigating farmers’ acreage choices, either in the multicrop econometric literature or in the mathematical programming literature. We provide original results aimed at characterizing the properties of optimal acreage choices accounting for crop rotation effects and constraints in an uncertain context. Using a stochastic programming approach together with a Lagrangian approach we show that optimal dynamic acreage choices can be formally characterized as static acreage choices with contingent renting/lending markets for acreages with specific preceding crops. The crop rotation constraint Lagrange multipliers provide the renting/lending prices of acreages with specific crop histories. The results presented in the article are mainly theoretical. Our modeling framework can easily be implemented in practice since it mainly considers quadratic programming problems and their solution functions.
    Keywords: crop rotation, constrained optimization, dynamic programming, stochastic programming, dynamic acreage choice model
    JEL: C61 D21 D24 D92 Q12
    Date: 2015
  9. By: Gloria Gonzalez-Rivera (Department of Economics, University of California Riverside); Wei Lin (Capital University of Economics and Business)
    Abstract: The current regression models for interval-valued data ignore the extreme nature of the lower and upper bounds of intervals. We propose a new estimation approach that considers the bounds of the interval as realizations of the max/min order statistics coming from a sample of n_t random draws from the conditional density of an underlying stochastic process {Y_t}. This approach is important for data sets for which the relevant information is only available in interval format, e.g., low/high prices. We are interested in the characterization of the latent process as well as in the modeling of the bounds themselves. We estimate a dynamic model for the conditional mean and conditional variance of the latent process, which is assumed to be normally distributed, and for the conditional intensity of the discrete process {n_t}, which follows a negative binomial density function. Under these assumptions, together with the densities of order statistics, we obtain maximum likelihood estimates of the parameters of the model, which are needed to estimate the expected value of the bounds of the interval. We implement this approach with the time series of livestock prices, of which only low/high prices are recorded making the price process itself a latent process. We find that the proposed model provides an excellent fit of the intervals of low/high returns with an average coverage rate of 83%. We also offer a comparison with current models for interval-valued data.
    Date: 2015–05

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