nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒08‒01
twenty-one papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. A guide to heterogeneity features captured by parametric and nonparametric mixing distributions for the mixed logit model By Yuan, Yuan; You, Wen; Boyle, Kevin J.
  2. Biomass Contracts for Ethanol Production: The Role of Farmer’s Risk Preferences By Wamisho, Kassu; De Laporte, Aaron; Ripplinger, David
  3. Neural Network Estimators of Binary Choice Processes: Estimation, Marginal Effects and WTP By Bergtold, Jason S.; Ramsey, Steven M.
  4. Estimating Adoption of Cover Crops Using Preferences Revealed by a Dynamic Crop Choice Model By Ji, Yongjie; Rabotyagov, sergey; Valcu-Lisman, Adriana
  5. Willingness-to-Pay for Sugar Fortification in Western Kenya By Pambo, Kennedy; Otieno, David; Okello, Julius
  6. Capturing More Relevant Measures of Spatial Heterogeneity in Stated Preference Willingness to Pay: Using an Iterative Grid Search Algorithm to Quantify Proximate Environmental Impacts By Holland, Benedict M.; Johnston, Robert J.
  7. Testing the influence of substitutes in nature valuation by using spatial discounting factors By De Valck, Jeremy; Broekx, Steven; Liekens, Inge; Aertsens, Joris; Vranken, Liesbet
  8. Corner solutions in empirical acreage choice models: an andogeneous switching regime approach with regime fixed cost By Koutchade, Obafèmi Philippe; Carpentier, Alain; Femenia, Fabienne
  9. Measuring consumer heterogeneous preferences for pork traits under media reports: choice experiment in sixteen traceability pilot cities, By Yan, Zhen; Zhou, Jie-hong; Li, Kai
  10. Consumers’ Willingness to Pay for Seafood Attributes: A Multi-species and Multi-state Comparison By Meas, Thong; Hu, Wuyang
  11. Using a Choice Experiment to Assess the Multiple Values of Land in Agricultural Uses in a Peri-urban Area: An Application to Edmonton, Canada By Wang, Haoluan; Swallow, Brent M.
  12. Importance of Contract Attributes on Conservation Reserve Program Enrollment Decisions in the Prairie Pothole Region By Dhingra, Neeraj; Wachenheim, Cheryl J.; Roberts, David; Lesch, William C.
  13. Empirical modelling of production decisions of heterogeneous farmers with mixed models By Koutchadé, Philippe; Carpentier, Alain; Féménia, Fabienne
  14. Adaptation to Climate Change through Crop Choice: A High Resolution Analysis By Wang, Haoying; Ortiz-Bobea, Ariel; Chonabayashi, Shun
  15. Estimating Latent Variable Models When the Latent Variable is Observable By Binkley, James K.; Pena-Levano, Luis M.
  16. Modeling No-Tillage Adoption by Corn and Soybean Producers: Insights into Sustained Adoption By Wade, Tara; Claassen, Roger
  17. Participation in Agritourism and Off-farm Work: Do Small Farms Benefit? By Khanal, Aditya R.; Mishra, Ashok; Koirala, Krishna H.
  18. Safer or Cheaper? Household Safety Concerns, Vehicle Choices, and the Costs of Fuel Economy Standards By Choi, Young-Young; Liu, Yizao; Huang, Ling
  19. Econometric Analysis of Motorists’ Preference for Ethanol in Motor Fuel By Liao, Kenneth; Pouliot, Sebastien
  20. Does Past Experience in Natural Disasters Affect Willingness-to-Pay for Weather Index Insurance? Evidence from China By Liu, Xianglin; Tang, Yingmei; Miranda, Mario J.
  21. Consumer Willingness to Pay for Environmental Production Attributes in Tomatoes: A Southeastern Consumer Survey By Maples, McKenzie; Morgan, Kimberly L.; Harri, Ardian; Hood, Kenneth; Interis, Matthew

  1. By: Yuan, Yuan; You, Wen; Boyle, Kevin J.
    Abstract: Unobserved heterogeneity is popularly modelled using the mixed logit model, so called because it is a mixture of standard conditional logit models. Although the mixed logit model can, in theory, approximate any random utility model with an appropriate mixing distribution, there is little guidance on how to select such a distribution. This study contributes to suggestions on distribution selection by describing the heterogeneity features which can be captured by established parametric mixing distributions and more recently introduced nonparametric mixing distributions, both of a discrete and continuous nature. We provide empirical illustrations of each feature in turn using simple mixing distributions which focus on the feature at hand.
    Keywords: choice experiment, choice model, mixed logit, random parameters logit, mixing distribution, latent class logit, preference heterogeneity, unobserved heterogeneity, Health Economics and Policy, Research Methods/ Statistical Methods,
    Date: 2015–07
  2. By: Wamisho, Kassu; De Laporte, Aaron; Ripplinger, David
    Abstract: This study analyze what contracting terms provides sufficient incentives for farmer’s to enter into a contract to produce energy beets for biofeul production. A stated choice experiment was designed to elicit farmer’s preferences to grow energy beet under alternative contractual arrangements. A latent class rank-ordered logit [LCROL] model is used to empirically analyze the effects of contract attributes, farmer’s risk preferences, and farm characteristics on willingness to adopt energy beet. The results shows that the way the contract mechanism is designed significantly affects farmer’s preference to rank contract alternatives. Few risk perception factors extracted from farmer’s response play a role on the preference of contracts.
    Keywords: Contracts, Energy Beets, Ethanol, Risk Preferences, Rank Order Logit Model, Agribusiness, Industrial Organization, Institutional and Behavioral Economics, Resource /Energy Economics and Policy,
    Date: 2015–07
  3. By: Bergtold, Jason S.; Ramsey, Steven M.
    Abstract: Estimation of binary choice models typically require that the econometric model satisfy the utility maximization hypothesis. The most widely used models for this purpose are the binary logit and probit models. To satisfy the utility maximization hypothesis the logit and probit models must make a priori assumptions regarding the underlying functional form of a representative utility function. Such a theoretical restriction on a statistical model withouth considering the underlying probabilistic structure of the observed data can leave the postulated estimable model statistically misspecified. Feed-forward back-propagation artificial neural networks (FFBANN) provide a potentially powerful semi-nonparametric method to avoid misspecifications. This paper shows that a single-hidden layer FFBANN can be interpreted as a logistic regression with a flexible index function. An empirical application is conducted using FFBANNs to model a contingent valuation study and estimate marginal effects and willingness-to-pay. Results are used for comparison with more traditional methods such as the binary logit and probit models.
    Keywords: Binary Choice, Contingent Valuation, Logistic Regression, Neural Networks, Marginal Effects, Seminonparametric, Willingness to Pay, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,
    Date: 2015
  4. By: Ji, Yongjie; Rabotyagov, sergey; Valcu-Lisman, Adriana
    Abstract: In this paper, we propose a framework based on micro-level dynamic land use models to predict the adoption of cover crops in the Upper-Mississippi River Basin. We use preferences recovered using a dynamic discrete model of crop choice to build a dynamic optimization framework to evaluate a range of scenarios based on the cover crops’ effect on cash crop yields, costs of cover crop operations, and government support. We use a conditional choice probability method to estimate the dynamic crop choice model based on field-scale panel data and value function iteration method to assess counterfactual cover crop scenarios. The framework is expected to be applicable to modeling decisions to adopt conservation technologies in the absence of individual-level adoption data or for cases when conservation technology is new. The dynamic crop choice model yields expected results and reveals preferences for net revenues in line with previous literature. Simulation results predict baseline cover crop adoption rates which, although in line with some recent farmer surveys, are quite a bit higher than rates reported in 2012 Census of Agriculture. We attribute these results to substitution patterns implied by a dynamic logit model estimated, and suggest using aggregated Census of Agriculture data on state-wide adoption of cover crops to calibrate the constants in the the estimated dynamic logit model as a possible remedy under paucity of data related to individual decisions on cover crops adoption.
    Keywords: Land Use, Dynamic Discrete Choice, Cover Crop, Land Economics/Use, Q12, Q18,
    Date: 2015
  5. By: Pambo, Kennedy; Otieno, David; Okello, Julius
    Abstract: Food fortification presents practical and cost-effective alternative to the fight against micronutrient malnutrition. Vitamin A deficiency and lack of iron bears the greatest economic importance in Kenya. To understand the potential for mass industrial fortification programs, the study assessed the consumers’ willingness-to-pay for fortified sugar using choice experiment approach, on a sample of 162 sugar consumers drawn from Western Kenya. The results revealed that consumers are willing to pay positive premiums for most fortified sugar attributes, except the attribute involving sensory characteristics. The study conclude by suggesting specific sugar fortification targets for various consumer segments.
    Keywords: Vitamin A deficiency, fortification, sugar, choice experiment, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2015
  6. By: Holland, Benedict M.; Johnston, Robert J.
    Abstract: Willingness to pay (WTP) for public goods is often spatially heterogeneous; the relevance of this heterogeneity for policy analysis is increasingly recognized. Within stated preference (SP) analysis, the most commonly analyzed form of spatial heterogeneity is distance decay, in which WTP is assumed to diminish as a monotonic function of distance from the affected resource. This distance is typically calculated from each respondent’s household to the nearest point of the affected resource, using either Euclidean or travel distance. A small but increasing literature, however, now suggests the limitations of a simple distance decay paradigm as the sole means to evaluate spatial heterogeneity. This article illustrates a novel approach to account for spatial welfare heterogeneity that may better capture the systematic sensitivity of preferences to resource proximity. The model accounts for the amount of the affected resource surrounding each respondent’s home location, at distance bands of varying length, rather than the distance to the closest point. This alternative “quantity-within-distance-x” measure is used as a substitute for the common “distance-to-nearestpoint” measure with distance-related models of spatial welfare heterogeneity. Methods and results are illustrated using a choice experiment addressing preferences for riparian land restoration in south coastal Maine. Results suggest that the resulting models better capture spatial elements relevant to respondents’ preferences. Comparison to standard distance decay models shows the additional insight provided by this novel approach.
    Keywords: choice experiment, distance decay, nonmarket valuation, Environmental Economics and Policy, Land Economics/Use,
    Date: 2015
  7. By: De Valck, Jeremy; Broekx, Steven; Liekens, Inge; Aertsens, Joris; Vranken, Liesbet
    Abstract: This paper investigates the effect of nearby nature substitutes on preferences for nature restoration. Previous studies have generally approached the substitution question by looking into competing destinations. We evaluate substitutes from the respondent’s viewpoint. We use a contextual approach relying on densities of nature substitutes within various ranges from each respondent’s home. This approach has the advantage of allowing the consideration of the direct, indirect and non-use values of nature. Data from three similar discrete choice experiments carried out in Flanders (northern Belgium) are compared. Different spatial discounting factors are tested to better understand how the substitution effect behaves with regard to distance. Latent class analyses are performed to account for preference heterogeneity among respondents. Our results show divergent behaviours across groups of respondents. The “distance-to-substitutes” affects the way respondents rank substitutes and we observe a significant influence of the squared average buffer distance. However, this effect varies in sign across case studies and classes of respondents. Our research calls for further investigation of the influence of taste heterogeneity and nature perception on people’s capacity to value nature. The eligibility of potential nature substitutes and what contributes to their relative attractiveness compared to other substitutes, deserve further exploration in future research.
    Keywords: discrete choice experiment, distance, GIS, latent class, nature valuation, spatial, substitute, Environmental Economics and Policy, Q20, Q26, Q51, Q57,
    Date: 2014–08
  8. By: Koutchade, Obafèmi Philippe; Carpentier, Alain; Femenia, Fabienne
    Abstract: Corner solution problems are pervasive in micro-econometric acreage choice models because farmers rarely produce the same crop set in a considered sample. Acreage choice models suitably accounting for corner solution need to be specified as Endogenous Regime Switching (ERS) models. Micro-econometric ERS models are however rarely used in practice because their estimation difficulty quickly grows with the dimension of the considered system. Their functional form is generally quite involved and their congruent likelihood functions need to be integrated using simulation methods in most case of interest. We present here an ERS model specifically designed for empirically modeling acreage choices with corner solutions. This model is theoretically consistent with acreage choices based on the maximization of a profit function with non-negativity constraints and a total land use constraint. It can be combined with yield supply and variable input demand functions. Furthermore, the model accounts for regime fixed costs which represent crop specific marketing and management costs. To our knowledge, this is a unique feature for an ERS model accounting for non-negativity constraints. The proposed ERS model defines a Nested MultiNomial Logit (NMNL) acreage choice model for each potential production regime. The regime choice is based on a standard discrete choice model according to which farmers choose the crop subset they produce by comparing the different regime profit levels. The structure of the model and the functional form of its likelihood function makes the Simulated Expectation-Maximisation algorithm especially suitable for maximizing the sample likelihood function. The empirical tractability of the model is illustrated by the estimation of a five crop production choice model for a sample of French grain crop producers.
    Keywords: Production Economics, Research Methods/ Statistical Methods, Q12, C13, C15,
    Date: 2015
  9. By: Yan, Zhen; Zhou, Jie-hong; Li, Kai
    Abstract: The absence of original information in traceability system is the major risk to pork safety in China. An increasing number of recent media reports on pork safety problems at source have attracted great attention and thought to be a growing threat to risk perception amplification on pork safety, even leading to public panic. Understanding how people react to media report is essential to enhance pork quality management, and the design of effective information dissemination policy. This paper was among the first to explore the impact of media report about potential benefits and risk of traceability on consumer utility valuation and preference heterogeneities for select pork traits. By capturing key issues from online media reports in last three years both on benefit (positive group) and risk (negative gourp) of traceability as information shock showed to interviewees, we investigate willingness to pay from 788 consumers across sixteen traceability pilot cities, China. A orthogonal factorial design was employed, which resulted in twelve choice sets based on four two-level traits including information source (farmer or slaughter info.), production (free or captive range), brand (have or not), certificate (have or not), and three-level price. The mixed logit and latent class models are employed to examine preferences heterogeneity by using 28368 choice samples. The findings indicate that consumers value certification more than other pork traits, while only preference on farmerinfo labeling significantly imcreases in negative information group. Highly valued farmerinfo and free range labeling in same class from positive information shock, while consumer preference for free range in one class from negative group. The results suggests existence of preference heterogeneity based on two aspects of media report. Considering heterogeneity within population segments provides a framework for adapting information dissemination to react in food crisis for firm managers, and to improve pork product labeling policy interventions for food supervisors by integrating preferred pork traits in a traceability system.
    Keywords: Media report, Preference heterogeneity of pork traits, Choice experiments, Mixed logit and latent class model, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics,
    Date: 2015
  10. By: Meas, Thong; Hu, Wuyang
    Abstract: This study surveys consumers’ perception of issues in seafood consumption and production and uses choice experiments to investigate consumer preference for the most consumed fish species. Results suggest that consumers were willing to pay positive premiums for fish from U.S. domestic origin and eco-friendly production practices. They were also willing to pay more for fish raised locally and fed with only natural vegetable based feeds. However, for two of the three species examined, there were no premiums found for fresh fish as compared to previously frozen fish. Importantly, comparing wild-caught to farm-raised seafood, the study found no positive willingness to pay, signaling higher acceptance of fish from aquaculture production over time.
    Keywords: Consumer Preferences for Seafood, Wild-Caught, Aquaculture, Willingness to Pay, Choice Experiment, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing, Q13,
    Date: 2014–02–04
  11. By: Wang, Haoluan; Swallow, Brent M.
    Abstract: Over the last 30 years, the Alberta Capital Region (the City of Edmonton and 23 surrounding cities, towns, villages and municipal districts) has experienced rapid population growth, economic development, and conversion of agricultural land into alternative land uses. As a result, some of the province’s most productive farmland has been converted into residential and industrial development. Between 2000 and 2012, growth rates for population and developed areas in Alberta Capital Region are approximately 30% and 50%, respectively. For all newly added developed areas, almost 90% were converted from agricultural land (Haarsma, 2014). Concerns about the pace and pattern of development and conversion have thus led to the creation of the Capital Region Board in 2009 and the provincial Land Use Framework in 2008. Despite the historical rates of conversion and the policy attention it has prompted, little research has been conducted to examine what values are being lost as a result of agricultural land conversion. This research has thus been undertaken to assess the multiple values of land in agricultural uses in the Alberta Capital Region, Canada. Some values (e.g., the market value of agricultural commodities) accrue mainly to private individuals and firms, while others (e.g., biodiversity conservation values) accrue to society in general. Values of some agricultural uses, such as those associated with the production of “local food”, regulation of water and air quality, or maintenance of peri-urban green spaces, may be weighed very differently by different interest groups. Based on existing literature, we extend the valuation with an application of ecosystem goods and services that Millennium Ecosystem Assessment (2005) proposes. The objectives of the study are three-fold: (1) Estimate values that residents in the region place on conserving land in different agricultural uses; (2) Explore the links between those values and residents’ affinity with different ecosystem goods and services; and (3) Identify areas and strategies that are of particular interest to the public for conservation in agricultural uses. The study began with a series of focus groups. Three focus group discussions were held with selected experts to define the context, scope and objectives of the empirical study, and one focus group with a random selection of study area residents to pre-test the survey. The second part of the study involved an internet-based survey with a panel of Alberta Capital Region residents recruited by the survey firm, Qualtrics. The survey instrument includes background information on the respondents’ attitudes toward conservation, and an attribute-based choice experiment. This method defines non-market valuation such as the values of environmental goods or services in terms of various attributes including price, and then assesses the respondents’ Willingness To Pay (WTP) for specific bundles of attributes (Grafton et al. 2003). The choice experiments ask respondents to consider an alternative conservation strategy for land in a specific agricultural use, in a specific type of area, with a specific cost, as opposed to the status quo that would result in no policy change. The conceptual model is derived from the standard random utility specification in which utility is divided into observable and unobservable components (Hanemann 1984). In the model, utility contains a deterministic component that consists of the observable attributes (In our case, that is, type of agricultural use, acres conserved, adjacent area, location proximity, and one-time cost), and a random unobservable component. The empirical estimation starts with a simple Multinomial Logit Model. We also use a Multinominal Logit Model with interaction terms to evaluate the effects of individual characteristics such as gender, residence, shopping behaviors, and attitudes towards government policies. More advanced models, such as Latent Class Model and Random Parameter Model, are also estimated to provide further insight into heterogeneity. This research contributes to identifying agricultural regions of outstanding conservation values so that they can be protected against future land conversion. The results indicate that relative to land adjacent to primary highways, land adjacent to conservation buffers is generally preferred for conservation in agricultural uses. Additionally, residents place higher values on land within a 10-kilometer buffer to currently developed areas over land within city limits. Regarding agricultural uses, livestock grazing on native pasture has the highest values, with hay land ranking second. Values for vegetable farms vary from group to group, and residents who do not typically get food from farmers’ markets, community gardens or farms have the lowest WTP for vegetable farms. Women generally place considerably higher value on farmland conservation than men. Residence, whether the respondents are from Edmonton or surrounding counties, does not seem to make a difference on values of land in agricultural uses. Furthermore, concerns for local food production, water purification and air quality are the top reasons for conserving land in agricultural uses. Further research in this study will use the welfare measure from the WTP estimation in cost-benefit analyses to inform decisions on land use changes, including the creation, restoration and compensation of agricultural or natural areas. The non-market values of ecosystem goods and services associated with different agricultural uses can also be compared to the financial costs of such projects. Local governments have already expressed interest in those analyses.
    Keywords: Choice Experiment, Agricultural Land Conservation, Peri-urban, Canada, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2015
  12. By: Dhingra, Neeraj; Wachenheim, Cheryl J.; Roberts, David; Lesch, William C.
    Abstract: Interest in the Conservation Reserve Program in the U.S. has waned. Enrollment for 2015 was targeted at 26 million acres but as of the end of February, actual enrollment had declined to 24.6 million acres (USDA, 2015). Available studies point to recent fluctuations in commodity prices as a predominant factor in this enrollment gap. Other potentially influencing factors remain understudied, including farmer preferences for contract design. A choice experiment was conducted in the Prairie Pothole region to assess these preferences. An exploded logit model was used to evaluate the preference heterogeneity among program attributes. Results indicate that an increase in maximum allowed rental payment, length of contract, and the government’s share of establishment cost increase utility of farmers, whereas, fixing terms at the beginning of the contract, and imposing more land use restrictions on enrolled land have a negative impact.
    Keywords: choice experiment, Conservation Reserve Program, Prairie Pothole Region, Environmental Economics and Policy, Land Economics/Use,
    Date: 2015
  13. By: Koutchadé, Philippe; Carpentier, Alain; Féménia, Fabienne
    Abstract: To account for the effects of heterogeneity in micro-econometric models has been major concern in labor economics, empirical industrial organization or trade economics for at least two decades. The micro-econometric agricultural production choice models found in the literature largely ignore the impacts of unobserved heterogeneity. This can partly be explained by the dimension of these models which deal with large choice sets, e.g., acreage choices, input demands and yield supplies. We propose a random parameter framework to account for the unobserved heterogeneity in micro-econometric agricultural production choices models. This approach allows accounting for unobserved farms’ and farmers’ heterogeneity in a fairly flexible way. We estimate a system of yield supply and acreage choice equations with a panel set of French crop growers. Our results show that heterogeneity significantly matters in our empirical application and that ignoring the heterogeneity of farmers’ choice processes can have important impacts on simulation outcomes. Due to the dimension of the estimation problem and the functional form of the considered production choice model, the Simulated Maximum Likelihood approach usually considered in the applied econometrics literature in such context is empirically intractable. We show that specific versions of the Stochastic Expectation-Maximization algorithms proposed in the statistics literature can be implemented.
    Keywords: Unobserved heterogeneity, random parameter models, agricultural production choices, Farm Management, Land Economics/Use, Production Economics, Research Methods/ Statistical Methods, Q12, C13, C15,
    Date: 2015
  14. By: Wang, Haoying; Ortiz-Bobea, Ariel; Chonabayashi, Shun
    Abstract: Recent statistical studies suggest yields for major U.S. food crops will dramatically decrease under climate change due to the rise of extreme temperatures over the growing season. However, these results do not account for changes in the crop mix, therefore overestimating potential damages to the sector. In this study we seek to determine how the crop mix and growing regions would shift in response to climate change. The paper develops a dynamic multinomial discrete choice framework to model adaptation to climate change through crop choice. A major innovation of this study is the construction of a very large high-resolution data set for the econometric analysis and the computational procedure developed to obtain estimates. We combine data on crop cover (USDA Cropland Data Layer (CDL), 30*30 meter resolution) and climate variables (PRISM, 4*4 km resolution) for the study region, matched with crop prices and production costs at regional level. The data set provides billions of spatial units from which we sample for the spatial analysis. The main advantage of such an extensive and detailed data set is the careful consideration of the spatial heterogeneity within counties. The generality of our empirical framework allows prediction of crop choices at field level under various climate change scenarios. The preliminary empirical results show that both market state variables (yields, prices, and costs) and crop state variables (related to crop rotations) are important predictors of farmers' crop choice at field level.
    Keywords: Agricultural Land Use, Crop Choice, Discrete Choice, Dynamic Optimization, Climate Change, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics, Research Methods/ Statistical Methods, Q15, Q24, Q54, R14, C35, C61,
    Date: 2015–05–27
  15. By: Binkley, James K.; Pena-Levano, Luis M.
    Abstract: Logit and probit models are designed to estimate latent variable models. However, there are cases that these estimates are used, even though the latent variable is fully observable. The most prominent examples are studies about obesity, where they calculate BMI based on two observed variables: weight and height squared. They translate BMI into a binary variable (e.g. obese or not obese) and this index is used to examine factors affecting obesity. This study determines the loss in efficiency of using logit/probit models versus the conventional OLS (e.g. with unknown variance). We also compare the marginal effects between these models. The results suggest that OLS is a more efficient than the logit/probit models when estimating the true coefficients, regardless of the multicollinearity, fit of regression and cut-off probability. Likewise, OLS provided unbiased marginal effects compared to both binary response models. It is also less likely to be biased. We can conclude, that according to our Monte Carlo simulation, when the latent variable is observable, it is better to use the continous value and regress it with respect to their explanatory variable instead of converting it into a latent variable.
    Keywords: efficiency, logit, probit, BMI, bias, latent variable, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods, B23, C01, C18, C51,
    Date: 2015
  16. By: Wade, Tara; Claassen, Roger
    Keywords: no-tillage, tillage history, continuous adoption, ordered logit, ARMS, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q12, Q15, Q18, Q24, Q1, Q2,
    Date: 2015
  17. By: Khanal, Aditya R.; Mishra, Ashok; Koirala, Krishna H.
    Abstract: Small farms face significant challenges using conventional crop production methods. They seek methods of generating alternative income both on- and off the farm. The literature considers these opportunities individually; however recent evidence shows that small farms engage in both activities simultaneously. This study analyzes factors influencing such choice decisions and their impact on farm and total household incomes. Using a large nation-wide farm survey data and selectivity based multinomial choice model, we found that small farms have higher household income if they chose a combination of both strategies rather than a single strategy. Additionally, education, age of the operator, financial conditions of the farm and location of the farm are important factors deriving alternative choice decisions for income diversifications.
    Keywords: Income diversification, multinomial logit, selectivity, agritourism, off-farm work, small farms, Agribusiness, Agricultural Finance, Farm Management, Labor and Human Capital, Production Economics, Research Methods/ Statistical Methods,
    Date: 2014–01
  18. By: Choi, Young-Young; Liu, Yizao; Huang, Ling
    Abstract: In this paper, we formulate and estimate a mixed logit model of consumer vehicle choices with micro-level data to examine the effect of safety concerns on their vehicle choices, especially on the preference for various vehicle characteristics linked to vehicle safety (MPG, weight, size, etc). Further, using the demand estimates, we simulate consumers’ vehicle choices under alternative fuel economy standards that will result in new product offerings from automakers. We then calculate and compare the welfare change for consumers with different safety concerns. The estimation results suggest that consumers’ safety concerns have significant impacts on their vehicle choices and their preference over safety-related vehicle characteristics.
    Keywords: Corporate Average Fuel Economy (CAFE) standards, a mixed logit, traffic safety, fuel economy, consumers' vehicle choices, Demand and Price Analysis, Industrial Organization, Resource /Energy Economics and Policy,
    Date: 2015
  19. By: Liao, Kenneth; Pouliot, Sebastien
    Abstract: This study uses E85 sales data to estimate motorists’ preference for ethanol. We apply a theoretical choice model linking the volume of E85 sold by a station to the underlying distribution of willingness to pay for E85 instead of traditional gasoline (E10) among motorists with flexible-fuel vehicles (FFVs). We estimate the model using instrumental variables techniques to control for the endogeneity of prices. We find that the average flex motorist switches to E85 when it is discounted by $0.57 per gallon in energy-equivalent dollars, but preferences are diverse, and about 11 percent of motorists choose E85 when the two fuels are priced equally in energy-adjusted terms. Our estimates of the demand for E85 provide new evidence of the potential demand for ethanol beyond the E10 blend wall.
    Keywords: Renewable fuels, alternative fuels, biofuels, ethanol, E85, flexible-fuel vehicles, consumer choice, imperfect substitutes, Demand and Price Analysis, Resource /Energy Economics and Policy, Q42, R41,
    Date: 2015
  20. By: Liu, Xianglin; Tang, Yingmei; Miranda, Mario J.
    Abstract: Although numerous index insurance pilot programs have been conducted in China, little is known about Chinese farmers’ willingness to pay for index insurance. By using a field survey of small farm households in China’s Heilongjiang Province, which suffered a large flood in the summer of 2013, this paper explores farmers’ willingness to pay (WTP) for a hypothetical rainfall index insurance product, with a special interest in whether farmers affected by the flood are willing to pay more than those where not.
    Keywords: index insurance, willingness-to-pay, natural experiment, Risk and Uncertainty,
    Date: 2015
  21. By: Maples, McKenzie; Morgan, Kimberly L.; Harri, Ardian; Hood, Kenneth; Interis, Matthew
    Keywords: Consumer/Household Economics, Demand and Price Analysis,
    Date: 2014–01

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