nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒03‒06
seven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Measuring reservation prices for bundles of fixed telecommunications services By Sobolewski, Maciej; Kopczewski, Tomasz
  2. Commercial Fishery as an Asset for Recreational Demand on the Coastline: Evidence from a Choice Experiment in France, United Kingdom and Belgium By Carole Ropars–Collet; Mélody Leplat; Philippe Le Goffe; Marie Lesueur
  3. The Climate Challenge for Agriculture and the Value of Climate Services: Application to Coffee-Farming in Peru By Filippo Lechthaler; Alexandra Vinogradova
  4. Enabling Participation of SMEs in International Trade and Production Networks: Trade Facilitation, Trade Finance and Communication Technology By Yann Duval; Chorthip Utoktham
  5. Who will close the energy efficiency gap? A quantitative study of what characterizes ambitious housing firms in Sweden By Högberg, Lovisa
  6. The Economic Value of Personal Information and Policy Implication By Kim, Jiin; Nam, Changi; Kim, Seongcheol
  7. Analysis of the Marketing Behaviour of African Indigenous Leafy Vegetables among Smallholder Farmers in Nyamira County, Kenya. By Momanyi, Denis; Lagat, Prof. Job K.; Ayuya, Dr. Oscar I.

  1. By: Sobolewski, Maciej; Kopczewski, Tomasz
    Abstract: Bundling becomes a dominant sales strategy in telecommunications. Dual and triple-play packages are increasingly popular among subscribers. From operators’ perspective, a core issue in bundling design is the knowledge about how consumers value packages. In this paper we focus on elicitation of subscribers willingness to pay for bundles of fixed telecommunication services composed of telephony, Internet and paid TV. We conduct a stated preference discrete choice experiment on a sample of subscribers in Poland, to model subscription choices over packages of fixed services. We obtain estimates of mean willingness to pay as well as entire distributions of reservation prices for single services and possible combinations of bundles. We find that mean WTP for fixed telephony as a stand-alone service or an add-on to bundle is zero. This result suggest that fixed telephony has already become an obsolete service. Out of the three fixed services, Internet generates the biggest value for customers, driving up valuations of bundles. WTP for Internet is much higher than actually paid prices, leaving space for increase of profits. In contrast fixed telephony and pay TV seem to be overpaid which may create a pressure on operators’ revenue.
    Keywords: Bundling,stated choice experiment,willingness to pay,fixed telephony,fixed broadband,pay TV,dual play,triple play,fixed-to-mobile substitution
    JEL: C25 D12 L96
    Date: 2015
  2. By: Carole Ropars–Collet; Mélody Leplat; Philippe Le Goffe; Marie Lesueur
    Abstract: The concept of multifunctionality of fishing activities is emerging, as fishery activities do not only provide commodity goods but have others functions (environmental, social, territorial, etc.). We choose to focus on the provision of amenities, such as the presence of fishing boats or direct sales of seafood, for which there is a demand that partly conditions the individual choices of visit on the coastline. We used a choice experiments method to estimate willingness to pay for these amenities produced jointly by commercial fishing. The empirical study was conducted on a sample of more than 2000 people surveyed along the coast of the Channel and of the North Sea in France, Belgium and United-Kingdom. We used a random parameter logit model to analysis the repeated individual choices.
    Keywords: Multifunctional fishery, Non-market value, Choice experiments; Multifunctional fishery, Non-market value, Choice experiments
    JEL: C35 C9 Q22 Q26
    Date: 2015
  3. By: Filippo Lechthaler (ETH Zurich, Switzerland); Alexandra Vinogradova (ETH Zurich, Switzerland)
    Abstract: The use of climate information in economic activities, typically provided by climate services, may serve as a possible adaptation strategy to changing climate conditions. The present paper analyzes the value of climate services aimed at improving agricultural productivity through a reduction in weather-associated risks. In the rst part, we provide a theoretical foundation for estimating the value of climate services by proposing a stochastic life-cycle model of a rural household which faces uncertainty with respect to the timing and the size of an adverse weather shock. We subsequently calibrate the model to match the environment of coee producers in the Cusco region of Peru and provide a range of estimates for the value of climate services for a single average household, the region, and the country as a whole. In the second part of the paper we use empirical data to verify the numerical estimates. We assess the value of climate services in the agricultural sector in Cusco based on a choice experiment approach. Data are analyzed using a standard as well as a random parameter logit model allowing for preference heterogeneity. Farmers show a signicant willingness-to-pay for enhanced climate services which is particularly related to the service accuracy and geographic resolution. On average, the yearly value of a climate service in the coffee sector is found to be in the range $20.64 - $21.10 per hectare and $8.1 - $8.2 million for Peru as a whole.
    Keywords: Agriculture, choice experiment, coee farming, coee rust, climate change adaptation, uncertainty
    JEL: C25 D81 H41 O13 Q12 Q16 Q51
    Date: 2016–01
  4. By: Yann Duval (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); Chorthip Utoktham (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: This study aimed at identifying key factors affecting SME participation in direct export and international production networks (IPNs), both globally and in Asia and the Pacific. A global dataset of firm-level data from developing countries was analyzed to identify the main obstacles to establishment and operation of direct and indirect small and medium size exporters. Logit models of SME export and IPN participation revealed the importance of several trade facilitation and related factors. The importance of modern information technology and international quality certification appear to be particularly crucial to participation in IPNs with SMEs using both at least 13% more likely to be involved in such networks. Exporting SMEs both globally as well as in the Asia-pacific region reported access to finance as the key obstacle to their business operations. Almost 60% of Asia-Pacific exporting SMEs rely exclusively on internal financing, while only 40% do so globally. Access to a variety of external trade finance sources was found to be important to boost SME export participation, with bank financing and supplier credit found to increase likelihood of SME participation in both direct export and IPNs most. The results particularly highlighted the importance of supply chain financing to facilitate direct export participation of Asia-Pacific SMEs. Comparing the marginal effects of various factors on SMEs and large enterprises, a reduction in customs and trade clearance times was also found to increase SMEs likelihood of participation in export or IPNs relatively more than that of larger enterprises.
    Keywords: Export participation, international production network, firm-level data, Asia and the Pacific, trade facilitation, trade finance, small and medium-sized enterprises (SMEs)
    JEL: F1 O5 C1
    Date: 2014–07
  5. By: Högberg, Lovisa (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: This paper reports the results from a study that attempts to identify factors that characterize housing firms with particularly ambitious approaches to energy efficiency in connection to renovation. The aim of the study was to identify factors that correlate with ambitious firms and the market they operate in. The study builds on previous results that identified four ideal types among Swedish housing firms, ranging from not ambitious to very ambitious with regards to energy efficiency. Based on the ideal types, this paper uses three levels of ambition and focuses on the more ambitious levels to see if there are factors that co-vary with an ambitious approach. Six hypotheses were formulated; ambitious firms were believed to be municipal, to be operating in markets with high and/or volatile energy prices, to be operating in strong markets, to have building portfolios in need of renovation, to be large and to have an expert employee who champions energy efficiency issues. Using web survey results from housing firms, an ordered probit model was used to test if level of ambition as the independent variable and a number of firm and market specific factors as dependent variables The results indicate support for some of the hypotheses; the probability of being ambitious increases if firms are municipally owned, have a building portfolio in need of renovation and have an employee who champions the energy efficiency issues. There were no indications that high/volatile energy prices, strong markets or firm size influence the probability of being more ambitious.
    Keywords: energy efficiciency; housing; sustainable renovation; incentives; drivers
    JEL: H23 Q55 Q58
    Date: 2015–01–26
  6. By: Kim, Jiin; Nam, Changi; Kim, Seongcheol
    Abstract: Personal information is essential in an information-oriented society for societal development and as a valuable business resource. However, because of poor management and a lack of proper protection, leakage of personal information can take place over time, and the standard for compensation is not well established. In order to establish appropriate policies for its protection, we need to know the economic value of personal information. Using conjoint analysis, we analyze the potential value of personal information by calculating the marginal willingness to pay of Korean consumers for each attribute of personal information, which we estimate to be 7501.70 South Korean won (about 6.81 US dollars) per month. After indirectly estimating the economic value of personal information, we provide some political implications regarding the potential market size of any personal information protection service.
    Keywords: The value of personal information,Marginal willingness to pay,Conjoint analysis,Multinomial logit model
    Date: 2015
  7. By: Momanyi, Denis; Lagat, Prof. Job K.; Ayuya, Dr. Oscar I.
    Abstract: The African Indigenous Leafy Vegetables (AILV) agricultural sub-sector in Kenya has in recent times gained considerable prominence and attention. A diverse number of studies have underpinned the role it can play in improving the economic standing of smallholders, while playing an imperative nutritional role in the diets of many consumers. Stemming from increased awareness on the rise of various lifestyle illnesses and crusaders championing for healthy eating habits, the demand of AILV, as healthier dietary alternatives, has been gradually on the rise. However, the socioeconomic and institutional factors that influence market participation and the effect of choice of market packages on AILV income are still not clear. Therefore, the main objectives of the study were: to characterize the socio-economic attributes of AILV farmers; to determine factors influencing households’ market participation behaviour; and to identify the combination of market outlets that deliver the highest payoffs (income) to farmers. The study was based on data collected from a sample of 254 households drawn from Nyamira North Sub-County in Nyamira County. A multistage sampling procedure was used to arrive at the sample, with semi structured questionnaires employed as the research instrument to collect qualitative and quantitative data through face to face interviews. The determinants of market participation behaviour among smallholders was estimated by an ordered probit model, while the combination of market outlets that delivered the highest payoffs (income) to farmers employed a multinomial endogenous switching regression. SPSS and STATA software were used for data analysis and management. Findings revealed that marketing experience, land ownership, households’ food self-sufficiency, contractual marketing, access to credit and extension services significantly influenced the regimes in which smallholders participated in markets. Further, using market packages that contained urban market outlets led to higher incomes among smallholders. It is not enough that farmers merely participated in markets, rather they should participate in markets profitably as net sellers. Identifying the specific challenges and requirements that are unique for each market regime (net sellers, autarkic and net buyers) through proper targeting and screening of farmers is necessary. Here, equipping extension workers with the ability to address the specific needs of each group is recommended. Urban markets, in isolation as well as in market packages, were clearly shown to offer higher incomes in actual and counterfactual scenarios. Improving the condition of roads linking urban markets to producers could potentially reduce transportation costs of accessing such urban markets. This could go on to encourage the use of urban markets among farmers, who stand to gain better income and gradually fish themselves out of poverty traps.
    Keywords: Ordered probit, Multinomial logit, Endogenous switching regression, AILV, Nyamira, Kenya
    JEL: Q13
    Date: 2016–01–13

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