nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒12‒11
eight papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Attribute Non-Attendance and Satisficing Behavior in Online Choice Experiments By Jones, Michael S.; House, Lisa A.; Gao, Zhifeng
  2. Certification Labels Vs Convenience Formats: What drives the market in aquaculture products? By Carlucci, Domenico; Dedevitiis, Biagia; Nardone, Gianluca; Santeramo, Fabio Gaetano
  3. The Demand for Season of Birth By Damian Clarke; Sonia Oreffice; Climent Quintana-Domeque
  4. Gain and loss of money in a choice experiment. The impact of financial loss aversion and risk preferences on willingness to pay to avoid renewable energy extarnalities. By Anna Bartczak; Susan Chilton; Mikołaj Czajkowski; Jürgen Meyerhoff
  5. Demand Estimation with Unobserved Choice Set Heterogeneity By Crawford, Gregory S.; Griffith, Rachel; Iaria, Alessandro
  6. On a way to overcome strategic overbidding in open-ended stated preference surveys: A recoding approach By Ewa Zawojska; Pierre-Alexandre Mahieu; Romain Crastes; Jordan Louviere
  7. Including time in a travel demand model using dynamic discrete choice By Blom Västberg, Oskar; Karlström, Anders; Jonsson, Daniel; Sundberg, Marcus
  8. Anything left for animal disease insurance? A choice experiment approach By Heinola, Katriina

  1. By: Jones, Michael S.; House, Lisa A.; Gao, Zhifeng
    Abstract: While a successful survey requires engaged and attentive respondents, careless survey completion remains a great concern in online market research. In this article, we test metrics of engagement in an online willingness-to-pay (WTP) study for fresh blueberry attributes using a major U.S. panel company and evaluate the impact that poorly behaving respondents have on subsequent data quality. In doing so, we investigate in detail the complex joint relationship between attribute non-attendance (ANA) and measures of respondent engagement in web surveying. Using fixed latent classes, an approach known as the Equality Constrained Latent Class procedure, we export individual probabilistic class assignment of all levels of attribute attendance to cross reference with respondents who fail measures of engagement and fraudulence, and analyze their composition and impact on latent classes, indicating non-attendance of individual and combinations of attributes. We also analyze engagement impacts on the tau variance parameter in the scaled mixed logit model and find strong links to unnecessarily increased heterogeneity when not properly filtering poorly behaving respondents. While WTP estimates between respondents passing and failing engagement metrics are similar with the ECLC model, filtering failing respondents in the scaled mixed logit model reduces overall WTP estimates. Results have implications for both WTP researchers and general online market researchers.
    Keywords: Agribusiness,
    Date: 2015–05
  2. By: Carlucci, Domenico; Dedevitiis, Biagia; Nardone, Gianluca; Santeramo, Fabio Gaetano
    Abstract: Consumer expectations in relation to food quality present new business opportunities for EU aquaculture producers who are willing to differentiate their products. In particular, new convenience formats and certification labels are likely to influence consumer choices. This study uses the choice experiment method to investigate consumer preferences and willingness to pay for new convenient formats and certification labels for oysters. Cross-sectional data were collected through a web-based consumer survey carried out in Italy in 2015. The main result of the study is that certification labels are decisively more effective than new convenient preparation formats to differentiate high quality products. However, some heterogeneity was detected in consumer preferences.
    Keywords: Consumer, Convenience, Discrete Choice, Ecolabels, Fishery, Italy, LCM, Oyster RPLM, Seafood
    JEL: Q11 Q18 Q22 Q28
    Date: 2016–12–05
  3. By: Damian Clarke (Universidad de Santiago de Chile); Sonia Oreffice (University of Surrey); Climent Quintana-Domeque (University of Oxford and St Edmund Hall)
    Abstract: We study the determinants of season of birth, for white married women aged 20-45 in the US, using birth certificate and Census data. We also elicit the willingness to pay for season of birth through discrete choice experiments implemented on the Amazon Mechanical Turk platform. We document that the probability of a spring first birth is significantly related to mother's age, education, smoking status during pregnancy, and the mother working in "education, training, and library" occupations, whereas a summer first birth does not depend on socio-demographic characteristics. We find consistent but stronger correlates when focusing on second births, while all our findings are muted among unmarried women. We estimate the average willingness to pay for a spring birth to be 600 USD, which is about 18% of the most valued birth in our Amazon Mechanical Turk experimental sample or 15% of the mean charges for a normal birth in 2013 according to the Agency for Healthcare Research and Quality.
    Keywords: quarter of birth, willingness to pay, NVSS, ACS-IPUMS, Amazon Mechanical Turk, discrete choice experiments, fertility timing
    JEL: I10 J01 J13
    Date: 2016–12
  4. By: Anna Bartczak (Faculty of Economic Sciences, University of Warsaw; Warsaw Ecological Economics Center); Susan Chilton (Newcastle University Business School); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Jürgen Meyerhoff (Institute for Landscape and Environmental Planning, Technische Universität Berlin)
    Abstract: We examine how the direction of price changes affects the value people place on avoiding renewable energy externalities in Poland. Additionally, we investigate the influence of individuals’ financial loss aversion and financial risk preferences on this valuation. In our study we conduct a choice experiment survey in which respondents’ choices indicate the value they place on avoiding wind, solar, and biomass externalities. We combine this survey with a financial lottery choice task that elicits the respondents’ risk preferences and degree of loss aversion. In the choice experiment we use both increases and decreases in electricity bills to depict the uncertain effect of new sources of energy generation on the current price level. This design allows us to investigate if obtained values are independent of the payment mechanism. In the analyzed context, our results indicate that marginal utility of money seems to be lower with a rebate on the energy bill than with a surcharge. Moreover, financial risk preferences affect people’s choices in a case of a surcharge, while loss aversion for money affects them in the case of a rebate. We find that the more loss averse people are with regard to money, the more they require compensation before they accept externalities from renewable electricity production. In contrast, the more risk seeking people are in a financial domain, the less cost sensitive they are and the more willing they are to pay for proposed changes in renewable electricity generation.
    Keywords: choice experiment, externalities of renewable energy, loss aversion, lottery experiment, marginal utility of money, risk preferences
    JEL: D81 Q20 Q42 Q49 Q51
    Date: 2016
  5. By: Crawford, Gregory S.; Griffith, Rachel; Iaria, Alessandro
    Abstract: We present a method to estimate preferences in the presence of unobserved choice set heterogeneity. We build on the insights of Chamberlain's Fixed-Effect Logit and exploit information in observed purchase decisions in either panel or cross-section environments to construct "sufficient sets" of choices that lie within consumers' true but unobserved choice sets. This allows us to recover preference parameters without having to specify the process of choice set formation. We illustrate our ideas by estimating demand for chocolate bars on-the-go using individual-level data from the UK. Our results show that failing to account for unobserved choice set heterogeneity can lead to statistically and economically significant biases in the estimation of preference parameters.
    Keywords: attention; discrete choice demand estimation; endogenous product choice; search; sufficient sets; unobserved choice set heterogeneity
    Date: 2016–12
  6. By: Ewa Zawojska (Faculty of Economic Sciences, University of Warsaw); Pierre-Alexandre Mahieu (University of Nantes, LEMNA); Romain Crastes (University of Leeds, Centre of Choice Modelling); Jordan Louviere
    Abstract: Stated preference (SP) surveys often use open-ended questions to elicit individuals’ willingness-to-pay values for goods, services, or policy projects. However, an open-ended format may encourage strategic overbidding, and so lead to biased value estimates. We propose a new approach, based on economic theory, to limit strategic overbidding in open-ended SP surveys: prior to the valuation question, respondents are told that their insincere responses will be (unfavourably) recoded as zeros. We develop a theoretical model and verify its predictions in a field SP study. We find that the approach works: respondents aware of subsequent unfavourable recoding of their insincere answers state significantly lower willingness-to-pay values.
    Keywords: stated preferences, contingent valuation, open-ended survey, strategic overbidding, recoding approach
    JEL: C80 D01 D11 D12 D61
    Date: 2016
  7. By: Blom Västberg, Oskar; Karlström, Anders; Jonsson, Daniel; Sundberg, Marcus
    Abstract: Activity based travel demand models are based on the idea that travel is derived from the demand to participate in different activities. Predicting travel demand should therefore include the prediction of demand for activity participation. Time-space constraints, such as working hours, restricts when and where different activities can be conducted, and plays an important role in determining how people choose to travel. Travelling is seen as a possibly costly link between different activities, that also implicitly leads to missed opportunities for activity participation. With a microeconomic foundation, activity based models can further be used for appraisal and for accessibility measures. However, most models up to date lack some dynamic consistency that, e.g., might make it hard to capture the trade-off between activity decisions at different times of the day. In this paper, we show how dynamic discrete choice theory can be used to formulate a travel demand model which includes choice of departure time for all trips, as well as number of trips, location, purpose and mode of transport. We estimate the model on travel diaries and show that the it is able to reproduce the distribution of, e.g., number of trips per day, departure times and travel time distributions.
    Keywords: Travel demand, Discrete choice, Dynamic discrete choice, Activity based modelling,
    JEL: R41
    Date: 2016–11–11
  8. By: Heinola, Katriina
    Keywords: Farm Management, Risk and Uncertainty,
    Date: 2016–10–04

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