nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒06‒18
nine papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Compensating environmental losses versus creating environmental gains Implications for biodiversity offsets and agri-environmental contracts By Le Coënt, Philippe; Preget, Raphaele; Thoyer, Sophie
  2. Substitutes or Complements? Consumers’ Preferences and Willingness to Pay for Animal Welfare, Organic, Local and Low Fat Food Attributes By Akaichi, Faical; Glenk, Klaus; Revoredo-Giha, Cesar
  3. Risk Aversion and Preferences for an Environmental Good: A discrete choice experiment By Dorner, Zack; Brent, Daniel A.; Leroux, Anke
  4. Serial non-participation and ecosystem services providers’ preferences towards incentive-based schemes By Villanueva, Anastasio J.; Glenk, Klaus; Rodriguez-Entrena, M.
  5. Consumer Preference and Demand for Traceable Food Attributes: A Choice-based Conjoint Analysis By Lu, Jiao; Wu, Linhai; Wang, Shuxian; Xu, Lingling
  6. When Can A Demand System Be Described By A Multinomial Logit With Income Effect? By Jacques-Francois Thisse; Philip Ushchev
  7. Farmer preferences for joint venture farm business structures: a choice experiment By Lynch, Brendan; Kragt, Marit; Umberger, Wendy; Llewellyn, Rick
  8. Non-farmers’ willingness to farm: a large-scale choice experiment to identify policy options that can induce new entry to the agricultural industry By Takahashi, Taro; Maruya, Kaori; Nakajima, Toru
  9. Understanding grain quality preferences in SE Asian markets, Using choice modelling to understand our markets By Carter, Chris; Jettner, Roslyn; Cato, Larisa; Quail, Ken; Louviere, Jordan

  1. By: Le Coënt, Philippe; Preget, Raphaele; Thoyer, Sophie
    Abstract: In the economic literature on the motivations underlying voluntary contributions to environmental public goods, little attention is granted to the way the overall objective of the environmental program is framed. A program which contributes to an increase of environmental quality can be perceived differently from a program designed to bring back the environmental quality to its original level, after it was damaged by human intervention, even if net environmental gain is equivalent in both programs. How does it impact participation rates and contribution levels? This paper addresses this issue in the context of agri-environmental contracts for biodiversity conservation. It compares farmers’ willingness to participate in two equivalent agri-environmental schemes, one being framed as part of a biodiversity offset program, the other one as a biodiversity conservation program. We demonstrate with a discrete choice experiment that biodiversity –offsets programs must offer a greater payment to enroll farmers compared to the latter. This is explained by the sensitivity of farmers to environmental issues.
    Keywords: biodiversity offsets, agri-environmental contrcts, choice experiments, behaviour, Agricultural and Food Policy, Environmental Economics and Policy, Q15, Q18, Q57,
    Date: 2016–04
  2. By: Akaichi, Faical; Glenk, Klaus; Revoredo-Giha, Cesar
    Abstract: A choice experiment was carried out in Scotland to assess consumers’ preferences and willingness to pay (WTP) for four popular food attributes (i.e. animal welfare, organic, local and low fat attributes) and determine whether these attributes are independent, complement or substitutes. The results showed that the majority of consumers have positive preferences and are willing to pay a price premium for the four attributes. Furthermore, the results from the interactions between attributes showed that labelling organic pork as local could significantly increase its demand. The results also show that the co-existence of animal welfare and organic/local/low fat labels is likely to generate a discounting effect on consumers’ total premium for these bundles of food attributes (i.e. these attributes are perceived by consumers as overlapping). Organic and local attributes were found to be independent.
    Keywords: Agricultural and Food Policy,
    Date: 2016–04
  3. By: Dorner, Zack; Brent, Daniel A.; Leroux, Anke
    Keywords: Environmental Economics and Policy,
    Date: 2016–02
  4. By: Villanueva, Anastasio J.; Glenk, Klaus; Rodriguez-Entrena, M.
    Abstract: The incidence of serial non-participation and protest responses has largely been ignored in willingness to accept (WTA) applications. This paper analyses serial non-participation with a focus on choice experiment applications using a WTA format to investigate preferences of ecosystem services providers towards incentive-based schemes. The paper addresses two main objectives. First, a review of the literature on WTA for participation in incentive-based schemes is used to identify and discuss a range of possible motives for protest responses that emerge in a WTA context. Second, drawing on choice experiment data on olive farmers’ preferences for agri-environmental scheme participation in Southern Spain, we analyse the impact on WTA estimates of censoring serial non-participation resulting from protest or high compensation requirements (very high takers) from further analysis. Using a random parameter logit model in WTA space, we find that the inclusion or exclusion of serial non-participants in the analysis can have a significant impact on marginal and total WTA estimates. Based on the findings, the paper makes recommendations on how to minimise the incidence of protest responses through survey design, regarding the identification of protesters as opposed to very high takers, and regarding the treatment of both for WTA estimation.
    Keywords: Protest response, Willingness to accept, Payments for ecosystem services, Agri-environmental schemes, Choice experiment, Agricultural and Food Policy, Environmental Economics and Policy, Q18, Q58,
    Date: 2016–04
  5. By: Lu, Jiao; Wu, Linhai; Wang, Shuxian; Xu, Lingling
    Abstract: The China market for traceable food has developed gradually over the past decade. This study surveyed 1380 consumers in seven pilot cities designated by the Chinese Ministry of Commerce for the construction of a meat and vegetable circulation traceability system. A choice-based conjoint analysis and multinomial logit model were used to study consumer preferences and demand for traceable pork attributes. The results demonstrated that certification of traceable information was the most important characteristic, followed by appearance and traceable information. Significant heterogeneity was observed in consumer preferences for the attributes of traceable pork. Consumers’ preferences for traceable attributes were significantly influenced by age, income level, and education level. Based on these results, we suggest that the government should strengthen the promotion of scientific knowledge regarding traceability systems, and encourage and support the production of traceable food with different traceability levels and different certification types. Moreover, the development of food traceability systems should be combined with a labeling system for quality certification.
    Keywords: Traceable Pork, Attributes, Levels, Consumer Preference, Choice-based Conjoint Analysis, Agricultural and Food Policy, Consumer/Household Economics, Q18,
    Date: 2016–04
  6. By: Jacques-Francois Thisse; Philip Ushchev (National Research University Higher School of Economics)
    Abstract: We show that a wide class of demand systems for dierentiated products, such as those generated by additive preferences, indirectly additive preferences, and Kimball-like homothetic preferences, can be given a multinomial logit foundation provided that the conditional indirect utility is nonlinear and varies with the whole price array.
    Keywords: discrete choice, multinomial logit, demand systems, additive preferences, homothetic preferences
    JEL: D43 L11 L13
    Date: 2016
  7. By: Lynch, Brendan; Kragt, Marit; Umberger, Wendy; Llewellyn, Rick
    Keywords: Agricultural and Food Policy, Farm Management,
    Date: 2016–02
  8. By: Takahashi, Taro; Maruya, Kaori; Nakajima, Toru
    Abstract: With the farming population aging across the developed world, securing a new generation of agricultural producers is an important step towards overcoming global food problems. The vast majority of the existing literature on new entry to agriculture base their analysis on data obtained from existing farms and farmers, an approach not necessarily adequate because the people who actually make decisions about entry are non-farmers. In this paper, we report the results of a large-scale choice experiment conducted in Japan to investigate the willingness of the country’s non-farming population to enter the agricultural industry. The results of a random parameter logit estimation showed that, in the absence of farmland, technical support and guaranteed sales, the agricultural income required to induce entry of an average Japanese person is approximately ¥22.0M (£121,000), a level well above their present income of ¥5.4M (£29,700); however, when all three services are provided, this value drastically lowers to ¥4.6M (£25,300). In addition, a ¥1M (£5,500) increase in agricultural income raises a person’s likelihood to enter the industry by 1.6 percentage points. To the best of the authors’ knowledge, this is the first study to quantitatively investigate non-farmers’ willingness to enter the agricultural industry.
    Keywords: Choice experiment, new entry, random parameter model, structural change, Agricultural and Food Policy, J43, Q13, Q18,
    Date: 2016–04
  9. By: Carter, Chris; Jettner, Roslyn; Cato, Larisa; Quail, Ken; Louviere, Jordan
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance,
    Date: 2016–02

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