nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2017‒05‒28
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Consumers' willingness to offset their CO2 emissions from traveling: A discrete choice analysis of framing and provider contributions By Schwirplies, Claudia; Dütschke, Elisabeth; Schleich, Joachim; Ziegler, Andreas
  2. Discrete Choice and Rational Inattention: A General Equivalence Result By Mogens Fosgerau; Emerson Melo; André De Palma; Matthew Shum
  3. Brecha de género en orientaciones de bachillerato. Caso de Uruguay By Maia Brenner
  4. Causal Impact of the Adoption of Soil Conservation Measures on Farm Profit, Revenue and Variable Cost in Darjeeling District, India By Ch; an Singha
  5. Decision process, preferences over risk and consensus rule: a group experiment By Morone, Andrea; Nuzzo, Simone; Temerario, Tiziana

  1. By: Schwirplies, Claudia; Dütschke, Elisabeth; Schleich, Joachim; Ziegler, Andreas
    Abstract: This paper identifies potential drivers and individuals' willingness to pay (WTP) for offsetting their emissions from traveling. We focus on the effects of framing the polluting activity with different modes of transportation (i.e. bus and plane) and travel occasions (i.e. holiday and professional training) as well as the effects of contributions from the travel provider. The analyses are based on discrete choice experiments with a representative sample of about 1000 consumers from Germany. Applying mixed logit and latent class logit models, the findings suggest substantial framing effects resulting from the variation in the mode of transportation as well as a significantly higher WTP when offsets are matched by the travel provider 1:1. The findings further indicate that re-/afforestation projects in the participants' region are the preferred mode for compensation. Respondents who are more willing to offset emissions from traveling seem to be younger and female, have a higher income, exhibit stronger environmental and social preferences, and believe that offsetting is effective in protecting the climate.
    Keywords: climate change,carbon offsetting,framing effects,provider contribution,willingness to pay,discrete choice experiments
    JEL: H41 Q54 Q58
    Date: 2017
  2. By: Mogens Fosgerau (DTU - Technical University of Denmark [Lyngby]); Emerson Melo (Indiana University [Bloomington]); André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan); Matthew Shum (CALTECH - California Institute of Technology)
    Abstract: This paper establishes a general equivalence between discrete choice and rational inattention models. Matejka and McKay (2015, AER) showed that when information costs are modelled using the Shannon entropy function, the resulting choice probabilities in the rational inattention model take the multinomial logit form. By exploiting convex-analytic properties of the discrete choice model, we show that when information costs are modelled using a class of generalized entropy functions, the choice probabilities in any rational inattention model are observationally equivalent to some additive random utility discrete choice model and vice versa. Thus any additive random utility model can be given an interpretation in terms of boundedly rational behavior. This includes empirically relevant specifications such as the probit and nested logit models.
    Keywords: convex analysis,generalized entropy,rational inattention,discrete choice,random utility
    Date: 2017–04–07
  3. By: Maia Brenner (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.)
    Abstract: This paper constitutes a first attempt to investigate the factors that underlie the gender gap existing in the choice of upper secondary courses in Uruguay. The paper aims to contribute in the understanding of the factors that account for the underrepresentation of women in STEM fields and courses demonstrating that there is an existing leaky pipeline. Discrete choice models (probit) and multinomial logistic models have been estimated using a retrospective survey applied in 2014 to Uruguayan young students who took the PISA test in 2009; finding that academic achievements, socioeconomic characteristics, attitude toward education and self-reported motives, influence the rational choices of individuals in upper secondary education. In fact, after controlling for socioeconomic and academic variables, it is observed that being female decreases the probability of choosing scientific courses in 8.7 percentage points. Furthermore, having repeated a grade before the age of 15 decreases the likelihood that women will opt for scientific courses, while it is not significant in the choice of men. Moreover, high reading performance at PISA test at age 15 increases the likelihood that both men and women will choose scientific courses. Better understanding of the factors that underlie the gender gap in STEM fields is necessary to design public policies capable of promoting gender equality and economic growth.
    Keywords: Economics of Education, Gender, STEM, PISA
    JEL: I20 I21 J16
    Date: 2017–03
  4. By: Ch; an Singha
    Abstract: This study attempts to evaluate the effects of on-farm soil conservation practices on farm profit and its components, revenue, and variable cost. Since farmers self-select themselves as adopters of a particular type of conservation measure, there could be a problem of selection bias in evaluating their soil conservation practices. We address the selection bias by using propensity score matching. The comparison includes not merely adoption status but also adoption intensity, to see if the adoption of multiple conservation measures results in higher estimates of impact than the adoption of fewer conservation measures. We use the logit and conditional logit model to determine propensity scores. We use primary survey data from the Darjeeling district of the Eastern Himalayan region for the year 2013. Our resultsfrom the binary adoption case suggest that there is no difference in the profits for the winter and monsoon seasons taken separately. Although revenues from adoption are higher, these appear to be associated with higher variable costs, thus resulting in no difference in profits. Furthermore, while the joint adoption of contour, afforestation, and bamboo plantation, or even just two of these measures, can lead to a significant gain in revenues, they also increase costs. The causal impact of the simultaneous adoption of soil conservation measures on per acre total revenue varies between INR 4560 and 5302 in the winter season and between INR 3469 and 5115 in the monsoon season. The causal impact of these soil conservation measures onthe per acre variable cost ranges from INR 3209 to 5345 during the winter season and from INR 2969 to 3657 in the monsoon season.
  5. By: Morone, Andrea; Nuzzo, Simone; Temerario, Tiziana
    Abstract: The recent literature on individual vs. group decisions over risk has brought about divergent results, mainly depending on the institutional rules through which groups take decisions. While some studies where group decisions relied on the majority rule showed no appreciable difference between individuals and groups’ preferences, others where unanimity among group members was required found collective decisions to be less risk averse than individual ones. Of course, these studies share the imposition of a choice rule to determine the groups’ outcome. Alternatively, in the study at hand, we elicited groups’ preferences over risk using a consensus rule, i.e. leaving groups free to endogenously solve the potential disagreement among their members, just as in many real life instances. Our results from a logit regression unambiguously show that individuals’ preferences are systematically further from the risk neutrality than those of groups. In particular, individuals are more risk seeker than groups when facing gambles with positive expected payoff difference and more risk averse in the opposite case.
    Keywords: Risk attitudes, group’s behaviour
    JEL: C91 C92 D01
    Date: 2017–05–23

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