nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒02‒12
three papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. A New Baseline Model for Estimating Willingness to Pay from Discrete Choice Models By Richard T. Carson; Mikołaj Czajkowski
  2. Modal choice between rail and road transportation : evidence from Tanzania By Iimi,Atsushi; Humphreys,Richard Martin; Mchomvu,Yonas Eliesikia
  3. Willingness to Pay for Government-Certified Agri-Products in South Korea By Lin, Yu-Hsuan; Kim, KyungJa

  1. By: Richard T. Carson (Department of Economics, University of California); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw)
    Abstract: We show a substantive problem exists with the widely-used ratio of coefficients approach to calculating willingness to pay (WTP) from choice models. The correctly calculated standard error for WTP using this approach is shown to always be infinity. A variant of this problem has long been recognized for mixed logit models. We show it occurs even in simple models like the conditional logit used as a baseline reference specification. It occurs because the standard error for the cost parameter implies some possibility that the true parameter value is arbitrarily close to zero. We propose a simple yet elegant way to overcome this problem by reparameterizing the coefficient of the (negative) cost variable to enforce the theoretically correct (and empirically almost always found) positive coefficient using an exponential transformation of the original parameter. This reparameterization enforces the desired restriction that no-part of the confidence region for original cost parameter spans zero. With it the confidence interval for WTP is now finite and well behaved. Our proposed model is straightforward to implement using readily available software. Its log-likelihood value is the same as the usual baseline discrete choice model and we recommend its use as the new standard baseline reference model.
    Keywords: conditional logit, confidence intervals, contingent valuation delta method, discrete choice experiment, Krinsky-Robb, multinomial logit, probit, welfare measures
    JEL: C01 C15 C18 Q0
    Date: 2018
  2. By: Iimi,Atsushi; Humphreys,Richard Martin; Mchomvu,Yonas Eliesikia
    Abstract: Rail transport generally has the advantage for large-volume long-haul freight operations. The literature generally shows that shipping distance, costs, and reliability are among the most important determinants of people's modal choice among road, rail, air, and coastal shipping transport. However, there is little evidence in Africa, although the region historically possesses significant rail assets. Currently, Africa's rail transport faces intense competition against truck transportation. With firm-level data, this paper examines shippers'modal choice in Tanzania. The traditional multinomial logit and McFadden?s choice models were estimated. The paper shows that rail prices and shipping distance and volume are important determinants of firms'mode choice. The analysis also finds that the firms'modal choice depends on the type of transactions. Rail transport is more often used for international trading purposes. Exporters and importers are key customers for restoring rail freight operations. Rail operating speed does not seem to have an unambiguous effect on firms'modal selection.
    Keywords: Transport Economics Policy&Planning
    Date: 2017–08–29
  3. By: Lin, Yu-Hsuan; Kim, KyungJa
    Abstract: This study investigated the value that government-issued certification labels adds to agricultural products. Using a face-to-face questionnaire administered in the Greater Seoul area, it assessed consumers’willingness to pay for government certification labels on four types of agri-products. Our results indicated that the premium for goods with these labels ranged from 7 to 32 per cent above the prices of non-certified products of the same types, while organic certificates for meat products earned higher willingness-to-pay scores than other certificate types. This clearly indicates the importance of such certification schemes to South Korean consumers. 본 연구에서는 다양한 정부인증마크가 부착된 농축산물에 대한 소비자 지불의도를 파악하고자 하였다. 이를 위해 수도권 지역 주부 소비자 306 명을 설문지를 이용한 대면면접 방식으로 조사하였다. 조사대상 농축산물은 곡류(쌀), 과일(사과), 채소(배추), 축산물(쇠고기)를 선정하고 인증마크가 없는 농축산물의 기준가격을 제시한 다음 유기농 마크와 우수농산물마크(GAP), 지리적 표시(GIS) 생산자이력추적 표시(APTMS)가 부착된 농축산물에 대한 추가지불의도(WTP)를 각각 측정하였다. 조사결과 인증마크가 부착된 농축산물에 대한 추가지불의도는 인증마크 미부착 농축산물에 비해 7~32% 높게 나타났다. 인증마크별로는 유기농 인증에 대한 지불의사가 가장 높았고 품목별로는 축산물에 대한 지불의사가 가장 높았다. 인증마크와 품목별 지불의사에 영향을 미치는 요소들도 또한 분석하였다.
    Keywords: certification system, Korean agri-product market, Willingness to pay, contingent valuation method (CVM)
    JEL: C83 D12 Q13
    Date: 2017–12

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