nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒07‒09
seven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Estimation of Spillover Effects from Large Scale Adoption of Transgenic (Bt) Corn in the Philippines By Brown, Zachary; Connor, Lawson; Rejesus, Rod; Jose, Yorobe
  2. Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China By Koichiro Ito; Shuang Zhang
  3. Green taxes in a post-Paris world: are millions of nays inevitable? By Stefano Carattini; Andrea Baranzini; Philippe Thalmann; Frédéric Varone; Frank Vöhringer
  4. Disposición a pagar por atributos diferenciales en productos de repostería artesanal By Carricart, Luis María
  5. Ordered Consumer Search By Armstrong, Mark
  6. Firm-Level Evidence on the Cooperative Innovation Strategies in Russian Manufacturing By Vitaliy Roud; Valeriya Vlasova
  7. Mind the Gap: Identifying Latent Objective and Subjective Multi-dimensional Indices of Well-Being By Luisa Corrado; Giuseppe De Michele

  1. By: Brown, Zachary; Connor, Lawson; Rejesus, Rod; Jose, Yorobe
    Abstract: This paper proposes the application of an econometric methodology developed in the environmental and urban economics literatures for studying spatial congestion and agglomeration to the context of agricultural pest control and technology adoption. The methodology allows the identification of spillover effects, either from bioeconomic feedbacks or social interactions, in discrete choice econometric models. We apply this framework to study area-level adoption and potential feedbacks from individuals’ decisions to adopt pesticidal transgenic corn, using a panel dataset from the Philippines. In a conceptual model, we show that a bioeconomic feedback through pest suppression will manifest as congestion effect. Identification in the econometric model is achieved by combining fixed effect conditional logit estimation with instrumental variable (IV) methods. Applying this econometric approach, we find evidence for a congestion spillover associated with the adoption of transgenic corn in the Philippines.
    Keywords: Crop Production/Industries, Environmental Economics and Policy, Industrial Organization, Risk and Uncertainty,
    Date: 2016
  2. By: Koichiro Ito; Shuang Zhang
    Abstract: We develop a framework to estimate willingness to pay (WTP) for clean air from defensive investment. Applying this framework to product-by-store level scanner data on air purifier sales in China, we provide among the first revealed preference estimates of WTP for clean air in developing countries. A spatial discontinuity in air pollution created by the Huai River heating policy enables us to analyze household responses to long-run exposure to pollution. Our model allows heterogeneity in preference parameters to investigate potential heterogeneity in WTP among households. We show that our estimates provide important policy implications for optimal environmental regulation.
    JEL: L0 Q0 Q5 Q51 Q52 Q53 Q56 Q58
    Date: 2016–06
  3. By: Stefano Carattini; Andrea Baranzini; Philippe Thalmann; Frédéric Varone; Frank Vöhringer
    Abstract: Turning greenhouse gas emissions pledges into domestic policies is the next challenge for governments. We address the question of the acceptability of cost-effective climate policy in a real-voting setting. First, we analyze voting behavior in a large ballot on energy taxes, rejected in Switzerland in 2015 by more than 2 million people. Energy taxes were aimed at completely replacing the current value-added tax. We examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes, along with the perception of ineffectiveness. Most people would have preferred tax revenues to be allocated for environmental purposes. Second, at the same time of the ballot, we tested the acceptability of alternative designs of a carbon tax with a choice experiment survey on a representative sample of the Swiss population. Survey respondents are informed about environmental, distributional and competitiveness effects of each carbon tax design. These impacts are estimated with a computable general equilibrium model. This original setting generates a series of novel results. Providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking. Making distributional effects salient generates an important demand for progressive designs, e.g. social cushioning or recycling via lump-sum transfers. The case of lump-sum recycling is particularly striking: it is sufficient to show its desirable distributional properties to make it one of the most preferred designs, which corresponds to a completely novel result in the literature. We show that providing proper information on the functioning of environmental taxes can close both the gap between acceptability ex ante and ex post and the gap between economists’ prescriptions and the preferences of the general public.
    Date: 2016–06
  4. By: Carricart, Luis María
    Abstract: El objetivo general de la presente investigación es identificar qué factores explican la disposición a pagar (DAP) de los consumidores por productos de repostería artesanal de calidad premium y libres de gluten. Se efectuaron encuestas coincidentales a 254 consumidores de entre 18 y 80 años de distintos estratos socioeconómicos, en un muestreo con cuotas en cuatro zonas geográficas de la ciudad de Mar del Plata. El análisis se realizó utilizando el método de valuación contingente y estimando un modelo binomial logit. Los resultados indican que en el caso de productos de calidad premium, la disposición a pagar de los consumidores aumenta conforme aumenta su nivel de ingresos y disminuye al aumentar el número de miembros en el hogar. La disposición a pagar de los consumidores está también asociada a la preocupación por la salud y a los hábitos saludables. En particular, la disposición a pagar es mayor en consumidores que se informan acerca de las propiedades de los alimentos que contribuyen a mejorar la salud, y en aquellas personas que habitualmente tienen un alto consumo de frutas y verduras. Se encontró además que la probabilidad de estar dispuestos a pagar por productos de repostería artesanal libres de gluten, no es mayor entre consumidores celíacos (o con familiares celíacos).
    Keywords: Disposición a Pagar; Atributos de Calidad; Alimentos; Método de Valoración Contingente;
    Date: 2016
  5. By: Armstrong, Mark
    Abstract: The paper discusses situations in which consumers search through their options in a deliberate order, in contrast to more familiar models with random search. Topics include: network effects (consumers may be better off following the same search order as other consumers); the use of price and non-price advertising to direct search; the impact of consumers starting a new search with their previous supplier; the incentive sellers have to merge or co-locate with other sellers; and the incentive a seller can have to raise its own search cost. I also show how ordered search can be reformulated as a simpler discrete choice problem without search frictions.
    Keywords: Consumer search, sequential search, ordered search, directed search, discrete choice, oligopoly, advertising, obfuscation.
    JEL: D21 D43 D83 L11 L15 M37
    Date: 2016–06–24
  6. By: Vitaliy Roud (National Research University Higher School of Economics); Valeriya Vlasova (National Research University Higher School of Economics)
    Abstract: This paper focuses on revealing the heterogeneous impact of firms’ specificities and the environment on the sophistication of the cooperative innovation strategies. We use the firm-level data on innovation strategies of over 1200 manufacturing enterprises in Russia to model the networking strategy as a simultaneous choice of the range of cooperative linkages (within and beyond the value chain and knowledge production sectors). The determinants comprise the internal factors (as absorptive capacity) and the external conditions (e.g. technological opportunities, appropriability and competition regimes). Revealed effects prove the initial heterogeneity hypothesis thus challenging the wide-spread simplified perception of ‘openness’ of the innovation strategy as a one-dimensional characteristic
    Keywords: Innovation cooperation; open innovation; firm-level; Russia; manufacturing; innovation strategy; multivariate probit.
    JEL: L2 O3
    Date: 2016
  7. By: Luisa Corrado (DEF and CEIS, Università di Roma "Tor Vergata" and University of Cambridge); Giuseppe De Michele (DEF, Università di Roma "Tor Vergata")
    Abstract: Within the OECD Better Life Initiative, the Better Life Index (BLI) represents a major attempt to measure well-being and societal progress beyond GDP, following up the recommendations outlined in the Stiglitz-Sen-Fitoussi Commission report. Using a Structural Equation Modeling (SEM) approach, we estimate BLI as a latent construct starting from eleven underlying dimensions of well-being. This method, based on variance-covariance matrices, allow us to study the interrelations and causal relationships across well-being determinants and across the underlying drivers of well-being. In our analysis we utilize two di¤erent comparable OECD datasets for the year 2012, one based on average country-level data re?ecting well-being outcomes, the other one on microdata re?ecting people?s stated preferences on well-being indicators. In order to deal with the idiosyncratic structures of the datasets, we apply two Structural Equation Modeling techniques ?bootstrapped SEM and Generalised SEM MIMIC-to estimate the relative weights and rankings of BLI dimensions. We then build an 'objective' BLI measure predicted from the national-level data, whereas a ?subjective? BLI is obtained using the new OECD microdata. Finally, we conclude our analysis comparing the objective and subjective BLI dimensions weights and country rankings and discussing the main policy implications.
    Keywords: Structural Equation Modeling, Latent Multidimensional Index, Beyond GDP, SubjectiveWell-Being Index, ObjectiveWell-Being Index, Stated Preference, Generalised SEM MIMIC, GSEM, Bootstrapped SEM, Small Sample Size, Weights.
    JEL: C43 C83 D12 I31
    Date: 2016–06–24

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