nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒12‒08
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Does Transport Behavior Influence Preferences for Elektromobility? An Analysis Based on Person- and Alternative-Specific Error Components By Francisco J. Bahamonde-Birke
  2. Analyzing the Continuity of Attitudinal and Perceptional Indicators in Hybrid Choice Models By Francisco J. Bahamonde-Birke; Juan de Dios Ortúzar
  3. Nudging farmers to sign agri-environmental contracts: the effects of a collective bonus By Laure Kuhfuss; Raphaële Préget; Sophie Thoyer; Nick Hanley
  4. Utility-Based Smartphone Energy Consumption Optimization for Cloud-Based and On-Device Application Uses By Baseem Al-athwari; Jorn Altmann
  5. Robust location of new housing developments using a choice model By Juan Carlos Espinoza Garcia; Laurent Alfandari
  6. Is there a valuation gap? The case of interval valuations By Bayrak, Oben K.; Kriström, Bengt

  1. By: Francisco J. Bahamonde-Birke
    Abstract: The interconnection among different choices by the same decision-maker is fairly well established in the literature. Along this line, this paper aims to identify how preferences for electromobility are affected by mode choices for regular trips. With this purpose in mind, a framework based on person- and alternative-specific error components (covariances) is proposed. The method aims to include individual-specific error components associated with the alternatives of a given experiment into another, and to analyze how the preference for a certain alternative in a given choice situation affects the individual’s preferences in another choice situation. The data for the analysis originates from two discrete choice experiment conducted in Austria during February 2013 (representative sample). Here, individuals were asked to state their preferences in the contexts of transport mode choice and vehicle purchase situations. The results indicate the existenceof a strong correlation between the individuals’ preferences in both experiments. This way, individuals favoring private transport also favor conventional vehicles over electric alternatives, while individuals preferring public or non-motorized modes ascribe a higher utility to electric vehicles, especially to pure battery electric vehicles.
    Keywords: Electric Vehicles, Travel Behavior, Modal Choice, Correlation, Panel Structure, Error Components
    JEL: R40 C35 C50
    Date: 2015
  2. By: Francisco J. Bahamonde-Birke; Juan de Dios Ortúzar
    Abstract: This paper addresses the continuity of attitudinal and perceptual indicators in hybrid discrete choice models and the main objective of this work is to compare the consequences of treating the indicators as continuous or ordinal outcomes, given different assumptions about the way in which these are stated. Based on tradition and for computational reasons, such indicators are predominantly treated as continuous outcomes. This usually neglects their nature (as respondents are normally asked to state their preferences, or level of agreement with a set of statements, using a discrete scale) and may induce important bias. We conducted an analysis based on simulated data and real data (two case studies) and were able to find that the distribution of the indicators (especially when associated with non-uniformly spaced thresholds) may lead to a clear deterioration of the model’s predictive capacity, especially when assuming continuous indicators. Along the same line, higher relative variability among the latent variables increases the differences between both approaches (ordinal and continuous outcomes), especially concerning goodness-offit of the discrete-choice component. It was not possible to identify a relation between the predictive capacity of both approaches and the amount of available information. Finally, both case studies using real data show an improvement in overall goodness-of-fit when considering the indicators as ordinal outcomes, but this does not translate in a better predictability of the discrete choices.
    Keywords: Latent Variables, Hybrid Discrete Choice Modelling, Attitudinal and Perceptual Indicators, Continuity
    JEL: C35 C50
    Date: 2015
  3. By: Laure Kuhfuss (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique, UM1 - Université Montpellier 1); Raphaële Préget (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique); Sophie Thoyer (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique, Montpellier SupAgro - Centre International d'Etudes Supérieures Agronomiques); Nick Hanley (University of St Andrews)
    Abstract: Using a choice experiment, this paper shows that the introduction of a conditional collective bonus in an agri-environmental scheme (AES) can improve farmers’ participation and increase land enrolment for lower overall budgetary costs. This monetary bonus is paid per hectare of enrolled land in addition to the usual agri-environmental payment if a given threshold is reached in terms of farmers’ participation in the region or catchment of interest. Using a choice experiment, we estimate the preferences of wine growers in the South of France for such a bonus. We show that it contributes to increased expectations of farmers on others’ participation, therefore changing the pro-environmental social norm and initiating group dynamics towards the adoption of less pesticide- intensive farming practices over time.
    Keywords: behaviour,choice experiment,collective incentive,payment for environmental services,social norm,agri-environmental schemes
    Date: 2015
  4. By: Baseem Al-athwari (TEMEP, College of Engineering, Seoul National University); Jorn Altmann (TEMEP, College of Engineering, Seoul National University)
    Abstract: As the use of smartphones and its applications continue their rapid growth, prolonging the smartphone battery lifetime has become one of the main concerns for smartphone users if re-charging is not possible. In this paper, we show that, by taking into account the user preferences, the energy consumption of smartphones can be adjusted to maximize the user utility. The user preferences are reflected through the type of application uses, the perceived costs of energy allocation for the different types of applications, and the perceived value of energy remaining in the battery of the smartphone. In particular, we optimize the energy consumption of smartphones through the use of a utility-based energy consumption optimization model, which we developed. We demonstrate the workings of our model by applying it to a simple scenario, in which we vary the perceived value of energy remaining in the smartphone battery and the user’s perceived costs for energy consumed by the two types of application uses: cloud-based application uses and on-device application uses. Our results show that, by letting users express their preferences, users can allocate the remaining smartphone energy such that it maximizes their utilities.
    Keywords: Smartphones, Apps, Energy Consumption Optimization, Utility Function, Usage Behavior, Cloud Computing, Off-Loading, Application Alassification, Energy Allocation.
    JEL: C13 C61 D01 D11 L82 L86 M15
    Date: 2015–11
  5. By: Juan Carlos Espinoza Garcia (ESSEC Business School - Essec Business School); Laurent Alfandari (ESSEC Business School - Essec Business School)
    Abstract: We consider the issue of choosing a subset of locations to construct new housing developments maximizing the satisfaction of potential buyers. The allocation of demands to the selected locations is modeled by a choice model, based on the distance to the location, real-estate prices and incomes. We study two robust counterparts of the optimal location problem, where uncertainty lies on demand volumes for the rst one, and on customer preferences for the second one. In both cases, the parameters subject to uncertainty appear both in the objective function and constraints. The second robust model combines a scenario-based approach with nominal, price-centric and distance-centric scenarios on customers preferences, and an uncertainty budget approach that limits the number of cities that can deviate from the nominal scenario. Computational experiments are conducted on instances of the Paris region to analyze the tractability of the problem and its robust counterparts, and derive insights for the new housing development issue.
    Keywords: Housing,Robust Optimization, Multinomial Logit Choice Models, Facility Location
    Date: 2015–10–26
  6. By: Bayrak, Oben K. (CERE and the Department of Forest Economics, SLU); Kriström, Bengt (CERE and the Department of Forest Economics, SLU)
    Abstract: We extend the literature on the willingness-to-pay/willingness-to-accept (WTP/WTA) disparity by testing two hypotheses, distilled from the literature. We also introduce a modified mechanism for eliciting the subjective valuation range if the individual cannot articulate the subjective value as a precise amount confidently. Our key finding is that the disparity disappears under the intervals treatment, suggesting that response format is important, given that earlier experimental studies invariably uses point values (i.e. open ended questions about WTP/WTA). Moreover, for the risky prospect we observe that from their admissible range the buyers state the lower bound as their WTP whereas sellers state the upper bound as their WTA. We conclude that this type of behavior can to some extent explain the observed disparity at least for the risky prospects.
    Keywords: Valuation Gap; Imprecise Preferences; Interval Valuation; Willingness to Pay and Accept Disparity; Endowment Effect
    JEL: C90 Q50
    Date: 2015–11–26

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