nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒09‒26
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Frequentist inference in spatial discrete choice models with endogenous congestion effects and club-correlated random effects By Arnab Bhattacharjee; Robert L. Hicks; Kurt E. Schnier
  2. Willingness to pay for a differentiated potato applying a choice modelling experiment by socioeconomics levels of Argentinean consumers By Rodríguez, Elsa Mirta M.; Lupín, Beatriz; González, Julia
  4. The Cost of Greening Stimulus: A Dynamic Discrete Choice Analysis of Vehicle Scrappage Programs By Chao Wei; Shanjun Li
  5. Consumer’s Willingness to Pay for Gasohol E100 in Chiang Mai Province and Nakhon Ratchasima Province. By Pacharaporn Arkornsakul; Woraphon Yamaka; Sombat Singkharat

  1. By: Arnab Bhattacharjee (Spatial Economics & Econometrics Centre (SEEC), Heriot-Watt University, UK); Robert L. Hicks (College of William and Mary, Williamsburg VA, USA); Kurt E. Schnier (University of California Merced CA, USA)
    Abstract: Agents may consider information and other signals from their peers (especially close peers) when making their spatial site choices. However, the presence of other agents in a spatial location may generate congestion or agglomeration effects. Disentangling the potential peer effects with issues of congestion is difficult since it is hard to ascertain whether the observed congestion effects are a result of observing others behavior or the influence of peer effects within the same network encouraging a fisherman to visit a site even in the presence of congestion. The research develops an empirical framework to decompose both motivations in a spatial discrete choice model in an effort to synthesize the congestion/agglomeration literature with the peer effects literature. Using Monte Carlo analysis we investigate the robustness of our proposed estimation routine to the conventional random utility model (RUM) that ignores both peer and congestion/agglomeration effects as well as the spatial sorting equilibrium model that ignore peer effects. Our results indicate that both the RUM and sorting equilibrium models can be used to successfully investigate the presence of a peer effects. However, the estimates of congestion effects are poor because of ignored correlated random effects. Recent literature has largely used Bayesian methods for this hard problem. We also explore the use of Fixed Effects Multinomial Logit estimates to first estimate the base model, and then extract generalized residuals to estimate the peer effects.
    Date: 2015–09–16
  2. By: Rodríguez, Elsa Mirta M.; Lupín, Beatriz; González, Julia
    Abstract: Choice Modelling surveying was applied to assess the importance of attributes and willingness to pay for a fresh potato produced with a low environmental impact production system.Among the stated preference methods, this is the most used to study consumer preferences for attributes of goods with little or no market share. We interviewed 402 individuals, aged 18, in super / hypermarkets and grocery stores. Four different attributes of potato: price, agrochemicals content, cooking quality and treatment were selected according to previous research carried out by the authors. For this purpose, a Conditional Logistic Model (McFadden, 1973) was applied. On the average, ceteris paribus, the full sample participants were willing to pay between US$ 0.60 and US$ 0.49 more per 1 kg of potatoes with low agrochemical content. Related to good cooking quality attributes, participants were willing to pay between US$ 0.31 and US$ 0.25 more per 1 kg of potatoes having this attribute.
    Keywords: Disposición a Pagar; Papa; Preferencias del Consumidor; Modelos Econométricos;
    Date: 2015–08
  3. By: Karnowahadi Karnowahadi (Department of Business Administration, Semarang Polytechnic State (Polines)); Indah Susilowati (Faculty of Economics and Business, Diponegoro University (UNDIP)); Purbayu Budi Santosa (Faculty of Economics and Business, Diponegoro University (UNDIP))
    Abstract: Surakarta city has various types of cultural heritage, both physical and non-physical, and has a great potential in improving the tourism sector. Surakarta is located at the southern part of Central Java bearing economic functions as a surviving historic city of the country. Despite the great opportunities for cultural heritage in Surakarta, the city is currently facing threats of high traffic, excessive depletion of the natural environment in the city. This is due to underestimation on the market values of cultural heritage indevelopment decisions. Surakarta require an additional source of income for the maintenance and preservation of cultural heritage. The research of willingness to pay (WTP) of the visitor of the Surakarta cultural heritage is needed. Cultural heritage is something that must be preserved, because it is a public good that can carry the name of Surakarta city in the arena of world culture. The aim of this study is to estimate the economic benefit of cultural heritage in Surakarta city as the results would be able to provide insight to the value of this unique heritage society. The methods employed is contingent valuation method (CVM). The payment vehicle opted in this study is via accomodation, where a fixed heritage charge per night was included in the total accomodation bill in Surakarta. In CVM, the logit model was defined based on dichotomous choice method to estimate the WTP randomly with different starting bid value. A total of 225 respondents were interviewed in person, using random stratified sampling method. Utility preservation of cultural heritage Surakarta influenced by several factors, such as gender, age, level of visit frequent, type of work, and the amount of WTP. Gender, age, and type of work affect the utility respondent preservation of Surakarta cultural heritage is a significant positive. Level of visit frequent variable been negatively affect utility. WTP of respondents is greater than the status quo. Variable income, national origin, marital status, and education level influence the utility of Surakarta cultural heritage preservation is not significant. How to withdraw funds for the preservation of Surakarta cultural heritage can be done by adding to the hotel and restaurant taxes, adding to the ticket of admission, or added to the retribution.
    Keywords: economic-valuation, heritage, CVM, Surakarta
  4. By: Chao Wei (George Washington University); Shanjun Li (Cornell University)
    Abstract: During the recent economic crisis, many countries have adopted stimulus programs designed to achieve two goals: to stimulate economic activity in lagging durable goods sectors and to protect or even enhance environmental quality. The environmental benefits are often viewed and much advocated as co-benefits of economic stimulus. This paper investigates the potential tradeoff between the stimulus and environmental objectives in the context of the popular U.S. Cash-for-Clunkers (CFC) program by developing and estimating a dynamic discrete choice model of vehicle ownership. Results from counterfactual analysis based on several specifications all show that the design elements to achieve environmental benefits significantly limit the program impact on demand stimulus: the cost of vehicle demand stimulus after netting out environmental benefits can be up to 77 percent higher under the program than that from an alternative policy design without the design elements aimed at the environmental objective.
    Date: 2015
  5. By: Pacharaporn Arkornsakul (Faculty of management sciences,Chiang Mai Rajabhat University); Woraphon Yamaka (Faculty of Economics Chiang Mai University); Sombat Singkharat (Faculty of management sciences,Chiang Mai Rajabhat University)
    Abstract: The purposes of this research was conducted to study the behavior of consumers who use gasohol and their willingness to pay for it and also to determine factors that influence consumer to pay for gasohol E100 in Chiang Mai and Nakhon Ratchasima Province. Contingent Valuation Method (CVM) was adopted as a hypothetical situation in the form of questionnaires which consists of double bounded dichotomous choice. Maximum Likelihood Estimation (MLE) was the method of analysis used and willingness to pay for gasohol by using Generalized Ordered Logit Model. Stata is needed for collecting data. The result of research found out that due to 800 samples from two sample group (Chiang Mai 400 samples and Nakhon Ratchasima 400 samples) to compare the willingness to pay for gasohol E100. It is discovered that most consumers was unwillingness to pay for the second gasohol quotation which was lower 32.50 Bath per liter due to most consumer were unconvinced the quality of gasohol E100. The measurement of willingness to pay for gasohol E100 average was 30.64 baths per liter in Chiang Mai group and 27.12 baths per liter in Nakhon Ratchasima group. In addition, attitude toward the environment is one of all factor are determining the willingness of consumers to pay for gasohol E100. Gasohol E100 is unknown among the majority of car users. Thailand Government should carry out promote and inform people about the benefits and drawbacks of gasohol E100 and should research on it. It should be supported as a short term and long term study. As a consequence, consumers will understand and be confident in using gasohol E100. This will change willingness of consumers to pay for gasohol E100
    Keywords: Willingness to pay; Gasohol E100; Energy
    JEL: C25 D10 Q58

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