nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒10‒04
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Analyzing farmers' preferences for substrate supply contracts for sugar beets By Sauthoff, Saramena; Anastassiadis, Friederike; Mußhoff, Oliver
  2. Export Behavior of the Turkish Manufacturing Firms By Aslihan Atabek Demirhan
  3. The Value of Endangered Forest Elephants for Local Communities in a Conservation Landscape By Jonas Ngouhouo Poufoun; Jens Abildtrup; Dénis Sonwa; Philippe Delacote
  4. The future’s so bright, I gotta wear sunscreen: Dispositional optimism and preferences for prioritizing health care By LUYTEN, Jeroen; DESMET, Pieter; KESSELS, Roselinde; GOOS, Peter; BEUTELS, Philippe
  5. A Simple Estimator for Dynamic Models with Serially Correlated Unobservables By Yingyao Hu; Matthew Shum; Matthew Shum; Ruli Xiao
  6. 'Industrial Transformation with Heterogeneous FDI and Human Capital' By King Yoong Lim

  1. By: Sauthoff, Saramena; Anastassiadis, Friederike; Mußhoff, Oliver
    Abstract: Biogas production using biomass of agricultural origin plays a key role in Germany's energy transition process. Being the main substrate, maize has been increasingly criticized in recent years leading to a down-regulation of this crop for the use in biogas plants by an adjustment of the Renewable Energy Sources (RES) Act in 2012. Thus, it is necessary to widen the range of sustainable and suitable substrate alternatives. This study explores German farmers' willingness to grow sugar beets for biogas production based upon the analysis of a discrete choice experiment with 118 arable farmers conducted from November 2013 to February 2014. Models are estimated in willingness to pay space. Our results reveal that at least two-thirds of the participating farmers assess biogas production from sugar beets as an important and sustainable alternative to maize. However, with respect to their own farms, farmers prefer to maintain their status-quo instead of choosing a contract. Findings also indicate that risk-averse farmers are more likely to contract sugar beets as a biogas substrate than less risk-averse farmers resulting in a lower price demand. However risk-averse farmers prefer short contract periods and a small share of their arable land, otherwise they demand a markup. Regarding the expansion of renewable energies these findings are highly relevant for future political decisions that aim to enable a sustainable energy transition.
    Keywords: sugar beets,alternative biogas substrate,discrete choice experiment,supply contract design
    Date: 2015
  2. By: Aslihan Atabek Demirhan
    Abstract: Up to date, Turkey’s export performance has been analyzed from macro perspective extensively. However, far too little attention has been paid to firm-level analysis contrary to ongoing and growing empirical literature. Using firm-level data of manufacturing sector during the period 1989-2010, this paper explored the export behavior of Turkish firms. The preliminary analysis revealed the superiority of exporting firms over non-exporters. Both self-selection and learning-by-exporting are found to be valid explanation for the source of this observed export premium. Dynamic discrete choice model results show that Turkish manufacturing firms are facing with export market entry costs and those costs are important determinants of the firms’ export propensity. Besides, it is observed that crises lead to changes in those entry costs and consequently changes in the export behavior of the firms.
    Keywords: Export behavior, Firm heterogeneity, Firm-level analysis, Micro econometrics, Turkey
    JEL: C25 C22 F14
    Date: 2015
  3. By: Jonas Ngouhouo Poufoun (Laboratoire d'Economie Forestière, INRA - AgroParisTech; University of Lorraine; Center for International Forestry Research (CIFOR) - Central Africa Regional Office); Jens Abildtrup (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Dénis Sonwa (Center for International Forestry Research (CIFOR) - Central Africa Regional Office); Philippe Delacote (Laboratoire d'Economie Forestière, INRA - AgroParisTech; Climate Economic Chair)
    Abstract: The purpose of this paper is to determine and characterize the social and cultural preferences for endangered forest elephants’ conservation in the Congo Basin’s Tridom landscape. The paper uses data from a 2014 representative face-to-face survey with a stratified random sample of 1035, in 108 villages in the Cameroonian and the Gabonese part of the landscape. To assess the willingness-to-pay (WTP) for elephant conservation, the questionnaire included two contingent valuation (CV) elicitation formats: Double Bounded Dichotomous choice (DBDC) and Open-Ended (OP). Combining both elicitation formats is expected to lead to an estimate that is closer to the true WTP. We find on average that local households are willing to pay monthly CFA 1139.4 (€1.74) to avoid forest elephants extinction. That’s CFA 62.8 million (€95,778) for the overall population per month or annually CFA 753.9 million ( €1.15 million). Indigenousness has a positive and significant higher WTP for elephant conservation. This is due to the loss of the spiritual enrichment, the cultural identity as well as the lifestyle of the indigenous Baka Pygmies with an extinction of the elephant. Applying spatial data, we find that local communities prefer elephant far from their crops. The estimates show that the existence of Human-Elephant Conflict does not influence their preferences for elephant conservation. Yet, this result is important, as the hypothetical scenario proposed to the households included the prevention of Forest-Elephant Conflict. Therefore, our study suggests that local communities can be willing to engage in biodiversity preservation, when the public benefit from conservation comes along with private benefits related to the avoidance of Human-Elephant Conflict.
    Keywords: Forest Elephant Extinction; indigenous people; Contingent Valuation; WTP; Interval Regression Model; Double-Hurdle Model.
    JEL: Q57 Q29 C24
    Date: 2015–10
  4. By: LUYTEN, Jeroen; DESMET, Pieter; KESSELS, Roselinde; GOOS, Peter; BEUTELS, Philippe
    Abstract: Priority setting in health care involves many complex social value judgments. Whereas a wide body of empirical research has emerged that describe how people make these judgments, little is known about the psychological background against which they are made. In this study, we investigate whether the character trait of dispositional optimism, i.e. anticipating a positive or negative future, influences the way people think about priority setting in health care. We do this by linking a representative sample of the Belgian population’s (N=750) responses on the Revised Life Orientation Test to their responses to a discrete choice experiment (DCE) about priority setting. We find that more pessimistic individuals are on average in worse (self-reported) health, are younger, are more likely to smoke and are less likely to have a university degree than their more optimistic counterparts. Controlling for these respondent characteristics, we find that dispositional optimism indeed matters to priority setting. “Pessimists” are less willing to invest limited resources in prevention and are less in support of prioritizing younger generations over older ones.
    Keywords: Equity, Prevention, Allocation, Personality, Discrete choice experiment
    JEL: C25 C99 I18 I19 H4
    Date: 2015–08
  5. By: Yingyao Hu (Johns Hopkins); Matthew Shum (Caltech); Matthew Shum (Compass-Lexecon); Ruli Xiao (Indiana University)
    Abstract: We present a method for estimating Markov dynamic models with unobserved state variables which can be serially correlated over time. We focus on the case where all the model variables have discrete support. Our estimator is simple to compute because it is noniterative, and involves only elementary matrix manipulations. Our estimation method is nonparametric, in that no parametric assumptions on the distributions of the unobserved state variables or the laws of motions of the state variables are required. Monte Carlo simulations show that the estimator performs well in practice, and we illustrate its use with a dataset of doctors' prescription of pharmaceutical drugs
    Date: 2015–09
  6. By: King Yoong Lim
    Abstract: This paper examines industrial transformation using an imitation-innovation growth model with a stylised internalisation framework developed to determine the composition of heterogeneous foreign multinationals in a developing host economy. A key feature of the model is the introduction of a dichotomous relationship between domestic and foreign ?firms, where the latter, each of which consisting of an expert bringing either standardisation or sophisticated know-how, perceives heterogeneity among the productivity of domestic workers. Productivity is a transformation of ability, hence linking the skills acquisition decision and foreign subsidiaries? operational mode choice along the same ability distribution. Calibrated for Malaysia, the simulations uncover complementarities between labour market and FDI-promoting policies. These complementarities are stronger in an environment with endogenous technological change.
    Date: 2015

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