nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒06‒05
eight papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Marine trade-offs: comparing the benefits of off-shore wind farms and marine protected areas By Aljona Karlõševa; Sulev Nõmmann; Tea Nõmmann; Evelin Urbel-Piirsalu; Wiktor Budziński; Mikołaj Czajkowski; Nick Hanley
  2. The roles of human values and generalized trust on stated preferences when food is labeled with environmental footprints: insights from Germany By Grebitus, Carola; Steiner, Bodo; Veeman, Michele
  3. State dependence and labour market transitions in the European Union By Richard Duhautois; Christine Erhel; Mathilde Guergoat-Larivière
  4. State Dependence in Welfare Receipt: Transitions before and after a Reform By Regina T. Riphahn; Christoph Wunder
  5. Valuing the environment: Happiness and willingness-to-pay By Cheng, Zhiming; Wang, Ben
  6. Household labour supply in Great Britain: can policy-makers rely on neoclassical models? By Tabet Khayat, Marie-Christine
  7. Detection of Implicit Fluctuation Bands and their Credibility in Candidate Countries By Simón Sosvilla-Rivero; María del Carmen Ramos-Herrera
  8. How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality By Christian Bünnings; Hendrik Schmitz; Harald Tauchmann; Nicolas R. Ziebarth

  1. By: Aljona Karlõševa (Stockholm Environmental Institute); Sulev Nõmmann (Stockholm Environmental Institute); Tea Nõmmann (Stockholm Environmental Institute); Evelin Urbel-Piirsalu; Wiktor Budziński (Faculty of Economic Sciences, University of Warsaw); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Nick Hanley (University of St Andrews)
    Abstract: The drive to increase renewable electricity production in many parts of Europe has led to an increasing concentration of location of new sites at sea. This results in a range of environmental impacts which should be taken into account in a benefit-cost analysis of such proposal. In this paper, we use choice modelling to investigate the relative gains and losses from siting new windfarms off the coast of Estonia, relative to the option of creating a new marine protected area. Methodologically, the paper makes a contribution by showing the ability of the latent class mixed logit model to represent both within-and between-class preference heterogeneity, and thus its power to provide a more sophisticated representation of preference heterogeneity than latent class or mixed logit approaches. The paper is also the first to use the latent class mixed logit in willingness-to-pay space for environmental goods.
    Keywords: discrete choice experiment, off-shore wind energy, marine protected areas, willingness to pay, renewable energy
    JEL: Q51 O13 Q56 Q58 Q42 Q48 Q25 Q28
    Date: 2015
  2. By: Grebitus, Carola; Steiner, Bodo; Veeman, Michele
    Abstract: This study explores influences of human values and trust on stated preferences for food labeled with environmental footprints. We apply survey data to assess influences of these individual-specific characteristics on German consumers’ stated choices of potatoes, through an attribute-based choice experiment in which product alternatives are described by footprint labels and prices. We find that accounting for consumers’ value systems, but not generalized trust beliefs, aids in understanding choices and identifying possible markets for footprint-labeled food products.
    Keywords: carbon footprint, ecological, Rokeach Value Survey, environmental sustainability, mixed logit
    JEL: C25 C9 M31 Q5
    Date: 2014
  3. By: Richard Duhautois (CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Christine Erhel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé); Mathilde Guergoat-Larivière (LIRSA - Laboratoire Interdisciplinaire de Recherche en Sciences de l'Action - Conservatoire National des Arts et Métiers [CNAM], CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé)
    Abstract: Using conditional dynamic multinomial logit models that allow to disentangle between state dependence and unobserved heterogeneity, this article proposes an empirical analysis of labour market mobility in the European Union based on EU-SILC data. It shows that the role of true state dependence varies a lot across social groups (according to age, sex and education) and across countries. In particular, state dependence can be related for the different social groups and country groups studied to various structural explanations in terms of institutional arrangements (education and retirement policies, leave policies, childcare policies, labour market policies…) and/or to employers' behaviour.
    Date: 2014–11
  4. By: Regina T. Riphahn; Christoph Wunder
    Abstract: We study state dependence in welfare receipt and investigate whether welfare transitions changed after a welfare reform. Using data from the German Socio-Economic Panel, we apply dynamic multinomial logit estimators and find that state dependence in welfare receipt is not a central feature of the German welfare system. We find that welfare transitions changed after the reform: transitions from welfare to employment became more likely and persistence in welfare and inactivity declined. We observe a large relative increase in transitions from employment to welfare. Immigrants’ responsiveness to the labor market situation increased after the reform.
    Keywords: Social assistance, state dependence, unemployment benefit II, immigration, dynamic multinomial logit
    JEL: I38 J61
    Date: 2015
  5. By: Cheng, Zhiming; Wang, Ben
    Abstract: This paper examines the impacts of subjective and objective measures of environmental quality on happiness and willingness to pay higher prices in China. We find that a higher level of happiness is associated with better air quality, but not necessarily with better water quality. The government can encourage willingness to pay for the former, but can only substitute it for the latter. Although perceived environmental quality is important for willingness-to-pay, it plays little role in rating happiness. However, a more highly perceived government effort increases both people’s life satisfaction and willingness-to-pay.
    Keywords: China; happiness; willingness-to-pay; environmental issues
    JEL: O13 Q53
    Date: 2015–05
  6. By: Tabet Khayat, Marie-Christine
    Abstract: This thesis empirically examines whether the neoclassical economic model provides an adequate framework to analyse a couple’s labour supply behaviour in Britain using recent data from the British Household Panel Survey. The thesis comprises three empirical chapters. The first chapter uses the instrumental variable (IV) estimation procedure to model the hours of work of married couples. This approach allows us to test whether some of the assumptions of the neoclassical model (e.g., income pooling and Slutsky properties) are satisfied by the data. In addition, further variables that have been identified as distribution factors in the literature are introduced to the empirical model to assess whether they play a role in explaining a couple’s hours of work. The first chapter only considers couples in which both spouses work. In the second chapter, the sample is amended to include all couples (i.e., those that work and those that do not) and the analysis conducted models a couple’s labour market participation decisions rather than their hours of work. After testing for income pooling and the impact of distribution factors, a further variable, the wife’s mother-in-law work status when the male spouse was aged 14, is introduced into the model. This is done to determine the effect of 'cultural' variables on labour market decisions. In the last chapter, this issue is explored further by explicitly modelling attitudes to a woman’s role in the labour market. This approach uses a bivariate ordered probit model given the ordinal nature of responses to the attitudinal questions and again restricts the analysis to couples only. Finally, gender-role attitudes are introduced to the labour supply framework used in the second chapter in order to evaluate whether beliefs regarding women’s role impact on a couple’s labour market decisions.
  7. By: Simón Sosvilla-Rivero (Department of Quantitative Economics, Universidad Complutense de Madrid); María del Carmen Ramos-Herrera (Department of Quantitative Economics, Universidad Complutense de Madrid)
    Abstract: This paper attempts to identify implicit exchange rate regimes for currencies of candidate countries vis-à-vis the euro. To that end, we apply three sequential procedures that consider the dynamics of exchange rates to data covering the period from 1999:01 to 2012:12. Our results would suggest that implicit bands have existed in many sub-periods for almost all currencies under study. Once we detect de facto discrepancies between de facto and de iure exchange rate regimes, we make use of different methods to study the credibility of the detected fluctuation bands. The detected lack of credibility in a high percentage of the sample is robust using the Drift Adjustment method and discrete choice models, suggesting that economic agents do not behave as if these bands actually were in force at time of making their financial plans. These countries do not improve the confidence on the fluctuation bands as time evolves.
    Keywords: exchange-rate regimes; implicit fluctuation bands; credibility; exchange rates.
    JEL: F31 F33
    Date: 2015–08
  8. By: Christian Bünnings; Hendrik Schmitz; Harald Tauchmann; Nicolas R. Ziebarth
    Abstract: This paper empirically assesses the relative role of health plan prices, service quality and optional benefits in the decision to choose a health plan. We link representative German SOEP panel data from 2007 to 2010 to (i) health plan service quality indicators, (ii) measures of voluntary benefit provision on top of federally mandated benefits, and (iii) health plan prices for almost all German health plans. Mixed logit models incorporate a total of 1,700 health plan choices with more than 50 choice sets for each individual. The findings suggest that, compared to prices, health plan service quality and supplemental benefits play a minor role in making a health plan choice.
    Keywords: Fee-for-service; capitation; mixed payment systems; physician altruism; laboratory experiment
    JEL: D12 H51 I11 I13
    Date: 2015–03

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