nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒06‒27
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Identifying Business Models for Photovoltaic Systems with Storage in the Italian Market: A Discrete Choice Experiment By Galassi, Veronica; Madlener, Reinhard
  2. Consumers’ willingness to pay for dairy products: what the studies say? A Meta-Analysis. By Ngoulma, Jeannot
  3. Environmental Benefits from Driving Electric Vehicles? By Stephen P. Holland; Erin T. Mansur; Nicholas Z. Muller; Andrew J. Yates
  4. Community managed forest groups and preferences for REDD+ contract attributes: a choice experiment survey of communities in Nepal By Dissanayake,Sahan T. M.; Jha,Prakash; Adhikari,Bhim; Bista,Rajesh; Bluffstone,Randall; uintel,Harisharan; Martinsson,Peter; Paudel,Naya Sharma; Somanathan,E.; Toman,Michael A.
  5. Income effects and the welfare consequences of tax in differentiated product oligopoly By Griffith, Rachel; Nesheim, Lars; O'Connell, Martin

  1. By: Galassi, Veronica (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: The future diffusion of photovoltaic systems relies heavily on the ability of utilities and policy-makers to properly valorize such volatile renewable energy-sources technologies. We conduct a discrete choice experiment to investigate which types of business models for photovoltaic systems could bring the highest utility to the Italian households. Our focus is not just on the costs and benefits of a photovoltaic system, but also on features like system control and maintenance, the duration of the electricity supply contract, as well as preferred channels of purchase and installation. Most importantly, we also include alternatives with battery storage. The data analysis – based on the Hierarchical Bayes estimation technique – reveals credible preferences for PV photovoltaic systems with battery storage facilities controlled by the utility or solutions characterized by lower investment costs. Multivariate analysis of variance coupled with the estimation of a random effects model with mixture of normal distributions suggests the presence of some heterogeneity across adopters and knowledgeable non-adopters, the latter particularly involving risk perception. Sensitivity analysis provides additional evidence in favor or these findings. On the basis of the results, we provide utilities and policy-makers with final recommendations.
    Keywords: DCE; Residential PV; Energy storage; Feed-in tariff
    JEL: C25 D12 O33 Q42
    Date: 2014–12
  2. By: Ngoulma, Jeannot
    Abstract: Willingness to pay (WTP) and consumer’s preferences for dairy products (milk, yogurt, butter and cheese) have attracted attention of researchers. Therefore, several studies have focused on the question of the measure of WTP for these different products. However, these studies found a value of WTP, which is positive or negative between different dairy products, or through the same types of products. We conduct a meta-analysis with the aim to observe the different factors, which can explain the variations of the results of the studies. Therefore, we selected 21 studies (corresponding to 142 observations) which estimates the WTP of consumers for dairy products. A geographical Indication (GI), a Bio label or other signs of quality, differentiates these products. As results, we found that on average, label’s effect is an important quality signal for surveyed consumers. Indeed, GI and Bio label on average increase the WTP of consumers for dairy products. Then, we highlighted that European consumers have an average of positive WTP for dairy products and this result is quite pronounced for French consumers. On the other hand, consumers seem to have a higher WTP for products derived from cow's milk and goat's milk. Finally, among dairy products, cheese has on average a negative and highly significant WTP. These results remain robust, that we use a sample consumer’s (conjoint analysis, auction, choice experiment, etc.) or a sample prices (hedonic price method), even after withdrawal of outliers. We concluded that the case of the cheese deserves more attention due to the particularity of consumer’s WTP for this type of dairy product.
    Keywords: consumer, willingness to pay, meta-analysis, dairy products
    JEL: Q13
    Date: 2015–06–24
  3. By: Stephen P. Holland; Erin T. Mansur; Nicholas Z. Muller; Andrew J. Yates
    Abstract: Electric vehicles offer the promise of reduced environmental externalities relative to their gasoline counterparts. We combine a theoretical discrete-choice model of new vehicle purchases, an econometric analysis of the marginal emissions from electricity, and the AP2 air pollution model to estimate the environmental benefit of electric vehicles. First, we find considerable variation in the environmental benefit, implying a range of second-best electric vehicle purchase subsidies from $3025 in California to -$4773 in North Dakota, with a mean of -$742. Second, over ninety percent of local environmental externalities from driving an electric vehicle in one state are exported to others, implying that electric vehicles may be subsidized locally, even though they may lead to negative environmental benefits overall. Third, geographically differentiated subsidies can reduce deadweight loss, but only modestly. Fourth, the current federal purchase subsidy of $7500 has greater deadweight loss than a no-subsidy policy.
    JEL: D62 H23 Q53 Q54
    Date: 2015–06
  4. By: Dissanayake,Sahan T. M.; Jha,Prakash; Adhikari,Bhim; Bista,Rajesh; Bluffstone,Randall; uintel,Harisharan; Martinsson,Peter; Paudel,Naya Sharma; Somanathan,E.; Toman,Michael A.
    Abstract: A significant portion of the world?s forests that are eligible for Reducing Emission from Deforestation and Forest Degradation, known as REDD+, payments are community managed forests. However, there is little knowledge about preferences of households living in community managed forests for REDD+ contracts, or the opportunity costs of accepting REDD+ contracts for these communities. This paper uses a choice experiment survey of rural communities in Nepal to understand respondents? preferences toward the institutional structure of REDD+ contracts. The sample is split across communities with community managed forests groups and those without community managed forest groups to see how prior involvement in community managed forest groups affects preferences. The results show that respondents care about how the payments are divided between households and communities, the severity of restrictions on firewood use, the restrictions on grazing, and the fairness of access to community managed forest resources as well as the level of payments. The preferences for REDD contracts are in general similar between community managed and non-community managed forest resource respondents, but there are differences, in particular with regard to how beliefs influence the likelihood of accepting the contracts. Finally, the paper finds that the opportunity cost of REDD+ payments, although cheaper than many other carbon dioxide abatement options, is higher than previously suggested in the literature.
    Keywords: Forestry Management,Wildlife Resources,Climate Change Mitigation and Green House Gases,Climate Change and Environment,Environmental Economics&Policies
    Date: 2015–06–22
  5. By: Griffith, Rachel; Nesheim, Lars; O'Connell, Martin
    Abstract: Random utility models are widely used to study consumer choice. The vast majority of applications make strong assumptions about the marginal utility of income, which restricts income effects, demand curvature and pass-through. We show that flexibly modeling income effects can be important, particularly if one is interested in the distributional effects of a policy change, even in a market in which, a priori, the expectation is that income effects will play a limited role. We allow for much more flexible forms of income effects than is common and we illustrate the implications by simulating the introduction of an excise tax.
    Keywords: compensation variation; demand estimation; income effects; oligopoly; pass-through
    JEL: H20 L13
    Date: 2015–06

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