nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒05‒30
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Student preferences for assignment systems: Results from a discrete choice experiment in Irish universities By Edel Doherty; Brendan Kennelly; Darragh Flannery; Stephen Kynes; John Considine
  2. Hedonic Model with Discrete Consumer Heterogeneity and Horizontal Differentiated Housing By Masha Maslianskaia Pautrel
  3. Willingness to Pay for Soccer Player Development in the United States By O. Ashton Morgan; John C. Whitehead
  4. Payment and Policy Consequentiality in Contingent Valuation By Peter A. Groothuis; Tanga M. Mohr; John C. Whitehead; Kristan Cockerill
  5. Asymptotics for maximum score method under general conditions By Taisuke Otsu; Myung Hwan Seo

  1. By: Edel Doherty (School of Business and Economics, National University of Ireland, Galway); Brendan Kennelly (School of Business and Economics, National University of Ireland, Galway); Darragh Flannery (Department of Economics, University of Limerick); Stephen Kynes (School of Business and Economics, National University of Ireland, Galway); John Considine (Department of Economics, University College Cork)
    Abstract: Data from a discrete choice experiment is used to explore preference heterogeneity associated with assignment systems between students in three universities in Ireland. The motivation for the study arises from recent technological advances which have led to a significant increase in the use of online assignment systems in disciplines such as economics and statistics. Despite this, little research exists to understand student preferences for online assignment systems and whether similarities emerge between students across universities. To investigate this issue, we employ latent class and random parameters logit models to explore both observed and unobserved heterogeneity in students’ tastes. Our findings reveal that significant heterogeneity in preferences is evident within and between students across the universities. The implications of this finding for the design of assignment systems are discussed.
    Keywords: Discrete choice experiment; Willingness to pay; Latent class model; Assignment systems; Student preferences
    Date: 2013–06
  2. By: Masha Maslianskaia Pautrel (LEG, University of Dijon)
    Abstract: This paper investigates how the hedonic equilibrium is modified when discrete consumer heterogeneity with horizontal differentiated housing supply is assumed. Our results are threefold. First, discrete consumer heterogeneity leads to a segmentation of the hedonic price function at equilibrium and the discontinuity of the implicit price of environmental quality on the borders of the segments. Second, we demonstrate that horizontal differentiation may lead to a partial sorting of consumer demand for housing attributes at hedonic equilibrium. Finally, we show that the discrete consumer heterogeneity with horizontal differentiation can lead to modification of welfare assessment related to changes in environmental quality.
    Keywords: Hedonic model, Discrete consumer heterogeneity, Horizontal differentiation, Locational choice
    JEL: R21 R31 Q51
    Date: 2015–07
  3. By: O. Ashton Morgan; John C. Whitehead
    Abstract: As evidenced by the viewing figures for the 2014 FIFA World Cup, U.S. interest in soccer and watching the National Team compete is growing. American households’ willingness to pay (WTP) for soccer player development is measured using the contingent valuation method and compared to the cost of player development. Data are drawn from two national surveys administered before and after the 2014 World Cup event. In the surveys, individuals are faced with two stated preference decisions: first, whether they perceive that additional funding for player development will improve the chances of the National Team’s performance at the 2018 World Cup and second, whether they are willing to pay an annual household tax to fund the program. We use a bivariate probit model to account for correlation between the two decisions. WTP estimates indicate that the intangible benefits of player development are roughly twice the cost, justifying the investment from a strictly benefit-cost perspective. Also, WTP is temporally reliable with no statistical difference in ex ante and ex post estimates. Key Words: Soccer, Willingness to Pay, Contingent Valuation Method
    Date: 2015
  4. By: Peter A. Groothuis; Tanga M. Mohr; John C. Whitehead; Kristan Cockerill
    Abstract: In stated preference survey research, policy consequentiality exists when the respondent believes that the results of a survey will influence actual policy. Payment consequentiality exists when respondents perceive that there is some non-zero probability that they will have to pay the bid amount. In this study we test for both types of consequentiality using a survey about water conservation measures in western North Carolina. Our analysis finds that both policy and payment consequentiality exist in responses to willingness-to-pay for water conservation measures. Respondents who self-report that they perceive the survey to be consequential are willing to pay positive amounts for the policy. Respondents who do not perceive the survey to be consequential answer with protest no responses and are not responsive to the tax amount in the referendum voting question. In addition as the tax amount increases respondents are less likely to find the survey to be consequential. Understanding the boundaries of consequentiality can contribute to improved survey design to estimate public willingness-to-pay for and acceptance of water conservation programs. Key Words:
    Date: 2015
  5. By: Taisuke Otsu; Myung Hwan Seo
    Abstract: Abstract. Since Manski's (1975) seminal work, the maximum score method for discrete choice models has been applied to various econometric problems. Kim and Pollard (1990) established the cube root asymptotics for the maximum score estimator. Since then, however, econometricians posed several open questions and conjectures in the course of generalizing the maximum score approach, such as (a) asymptotic distribution of the conditional maximum score estimator for a panel data dynamic discrete choice model (Honoré and Kyriazidou, 2000), (b) convergence rate of the modified maximum score estimator for an identified set of parameters of a binary choice model with an interval regressor (Manski and Tamer, 2002), and (c) asymptotic distribution of the conventional maximum score estimator under dependent observations. To address these questions, this article extends the cube root asymptotics into four directions to allow (i) criterions drifting with the sample size typically due to a bandwidth sequence, (ii) partially identified parameters of interest, (iii) weakly dependent observations, and/or (iv) nuisance parameters with possibly increasing dimension. For dependent empirical processes that characterize criterions inducing cube root phenomena, maximal inequalities are established to derive the convergence rates and limit laws of the M-estimators. This limit theory is applied not only to address the open questions listed above but also to develop a new econometric method, the random coefficient maximum score. Furthermore, our limit theory is applied to address other open questions in econometrics and statistics, such as (d) convergence rate of the minimum volume predictive region (Polonik and Yao, 2000), (e) asymptotic distribution of the least median of squares estimator under dependent observations, (f) asymptotic distribution of the nonparametric monotone density estimator under dependent observations, and (g) asymptotic distribution of the mode regression and related estimators containing bandwidths.
    Keywords: Maximum score, Cube root asymptotics, Set inference
    JEL: C13
    Date: 2014–01

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