nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒08‒14
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. A Choice Experiment Study on the Farmers’ Attitudes toward Biogas and Waste Reuse in a Nitrates Vulnerable Zone By Strazzera, Elisabetta; Statzu, Vania
  2. First economic assessment of ecosystem services from Natura 2000 network in Lombardy (Northern Italy) By Pettenella, Davide; Thiene, Mara; Scarpa, Riccardo; Masiero, Mauro; Mattea, Stefania; Franceschinis, Cristiano
  3. The value of the participation in Solidarity Purchasing Groups (SPGs): an empirical analysis in Piedmont By Corsi, Alessandro; Novelli, Silvia
  4. Identification of Dynamic Latent Factor Models: The Implications of Re-Normalization in a Model of Child Development By Francesco Agostinelli; Matthew Wiswall
  5. Willingness to Pay for Improved Irrigation Water Supply in Zambia: A Case of Kabwe City By Malama, Milton

  1. By: Strazzera, Elisabetta; Statzu, Vania
    Abstract: The present study aims at assessing dairy farmers’ preferences over different technological options related to the anaerobic digestion technology. A Choice Experiment study was conducted in Arborea, a NVZ dairy district located in Sardinia, Italy. The results show that profitability of the investment is a general driver of the choice. Heterogeneity of preferences is observed, especially as regards the options of investment on-farm or off-farm. Farmers who are especially interested in an investment on-farm are characterized by higher awareness of energy issues; while farmers with excess waste load would prefer an off-farm investment. Digestate treatment options have practically been ignored in our choice experiments: farmers do not seem aware of the opportunities offered by further processing of the digestate to improve management of the farm waste. New regulations associated with the Circular Economy EU package could increase the farmers’ perception of economic benefits associated with the adoption of anaerobic digestion technologies.
    Keywords: choice experiment, random parameter logit, anaerobic digestion, nitrates directive, Agribusiness, Resource /Energy Economics and Policy, Q16, C35, Q42,
    Date: 2016–06
  2. By: Pettenella, Davide; Thiene, Mara; Scarpa, Riccardo; Masiero, Mauro; Mattea, Stefania; Franceschinis, Cristiano
    Abstract: Natura 2000 network is a cornerstone for biodiversity conservation and the implementation of the European Union Biodiversity Strategy to 2020. Despite this, the great potential of the ecosystem service (ES) concept to add value to current conservation approaches remains insufficiently explored and there is a lack of quantitative and monetary data for the potential socio-economic benefits associated to the network. Information gaps on the economic value of ES provided by Natura 2000 are relevant in the case of Italy and, in particular, Lombardy, the Italian region hosting the highest number of Natura 2000 sites (242). The study considers the main potential ES delivered by the Natura 2000 network in Lombardy and performs a choice experiment exercise on two pilot areas (Adamello and Ticino Regional Parks) involving about 3,000 resident panellists at regional scale. Value function benefit transfer based on individual characteristics of respondents, land use and socio-economic characteristics of all regional municipalities has been performed as well. With few exceptions, results show an increase in willingness-to-pay (WTP) values that is consistent with the increase in the levels for attributes covered by the surveys. Besides providing some preliminary economic values, the research contributes to the development of a methodology for assessing and monitoring ES over time, with the aim to inform future policies and decision-making processes.
    Keywords: natura 2000, protected areas, ecosystem services, choice experiment, benefit transfer, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q57,
    Date: 2016–07
  3. By: Corsi, Alessandro; Novelli, Silvia
    Abstract: Solidarity purchasing groups (SPGs) are common Alternative Food Networks in many towns in Italy. They are set up by groups of citizens who cooperate in order to buy food and other commonly used goods collectively and directly from producers, at a price that is fair to both parties. Within the group, the choice of the products and the farmers usually follow some guidelines related to the respect for the environment and the solidarity between the members of the group and the producers. Though still a small niche, SPGs are quite numerous and represent an interesting alternative to traditional setting of the food chain. The main motivation of members for participating in SPGs is arguably not a monetary one, i.e., it is not lower prices. Ethical motivations and environmental concerns are typically proposed among the goals of the groups. Nevertheless, the budget constraint is always operating, and it is of interest to measure how much the ethical and environmental motivations are able to overcome the budget constraint. This is tantamount to measure the value members attach to their participation to the SPG. Hence, the aim of this study was to estimate the value the group members attach to their participation. A stated preferences methodology was employed on a first sample of members of SPGs in Torino (Italy) and other neighbouring towns to estimate the value consumers buying in such groups attach to this particular channel, in comparison to the conventional supermarkets. Preliminary results show that SPG members do state a preference for buying with their organization rather than at a supermarket’s even when the prospected prices are substantially higher for the purchase through the SPG.
    Keywords: ethical purchasing groups, consumers’ choices, stated preferences, alternative food networks, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, D1, D4, Q13,
    Date: 2016–07
  4. By: Francesco Agostinelli; Matthew Wiswall
    Abstract: A recent and growing area of research applies latent factor models to study the development of children's skills. Some normalization is required in these models because the latent variables have no natural units and no known location or scale. We show that the standard practice of “re-normalizing” the latent variables each period is over-identifying and restrictive when used simultaneously with common skill production technologies that already have a known location and scale (KLS). The KLS class of functions include the Constant Elasticity of Substitution (CES) production technologies several papers use in their estimation. We show that these KLS production functions are already restricted in the sense that their location and scale is known (does not need to be identified and estimated) and therefore further restrictions on location and scale by re-normalizing the model each period is unnecessary and over-identifying. The most common type of re-normalization restriction imposes that latent skills are mean log-stationary, which restricts the class of CES technologies to be of the log-linear (Cobb-Douglas) sub-class, and does not allow for more general forms of complementarities. Even when a mean log-stationary model is correctly assumed, re-normalization can further bias the estimates of the skill production function. We support our analytic results through a series of Monte Carlo exercises. We show that in typical cases, estimators based on “re-normalizations” are biased, and simple alternative estimators, which do not impose these restrictions, can recover the underlying primitive parameters of the production technology.
    JEL: C38 J13
    Date: 2016–07
  5. By: Malama, Milton
    Keywords: Willingness to pay, Contingent valuation method, Dichotomous choice, Irrigation, Environmental Economics and Policy, Public Economics,
    Date: 2015–09

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