nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒03‒05
two papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. What Aspects of Formality Do Workers Value? Evidence from a Choice Experiment in Bangladesh By Minhaj Mahmud; Italo A. Gutierrez; Krishna B. Kumar; Shanthi Nataraj
  2. Autonomous Vehicles in Japan: Latent demand and social dilemma (Japanese) By MORITA Tamaki; MANAGI Shunsuke

  1. By: Minhaj Mahmud; Italo A. Gutierrez; Krishna B. Kumar; Shanthi Nataraj
    Abstract: In this study, we use a choice experiment to elicit workers' willingness to pay (WTP) for specific job benefits typically associated with formal employment (contracts, termination notice, paid leave, preferred working hours, and access to a retirement account). We find that workers most value job stability: the average worker would be willing to give up 19 percent of monthly income for a 6-month contract, 27 percent for a 1-year contract and 44 percent for a permanent contract (relative to no contract). Thirty days' of termination notice would also be valued at about 12 percent of monthly income. Using a latent class model, we explore preference heterogeneity and find that government workers are more likely to place a higher value on long-term contracts than private sector employees, while casual workers are more likely to have a particularly strong preference for higher salary, and a relatively low WTP for various benefits. This heterogeneity may be driven by sorting or loss aversion. Our work also lends support to the use of choice experiments to overcome the challenges associated with estimating WTP for specific job benefits from hedonic wage regressions or from observed job durations.
    Date: 2017–07
  2. By: MORITA Tamaki; MANAGI Shunsuke
    Abstract: This study, using an online survey with large samples, analyzes the latent demand for autonomous vehicles in Japan. The analysis is twofold. First, we applied the choice-based conjoint analysis to estimate the respondents' willingness to pay (WTP) for the auto driving system (conditional automation and full automation) as well as the fuel types (hybrid and electricity) of a car that respondents would buy. We also estimate the factors affecting each of the five respondents' classes grouped by the latent class conditional logit, to elicit the consumer heterogeneity. We find that those who do not favor driving and those who trust the safeness of autonomous driving tend to have higher WTP for automation. Contrast to the preferences to fuel choice, the environmental concern and altruism of the respondents did not affect the selection of automation. Second, we deal with consumers' attitudes toward the moral dilemma that artificial intelligence (AI) armed in vehicles should face: "the trolley problem" of choosing between two evils, such as running over pedestrians or sacrificing themselves and their passenger to save the pedestrians. We find that, like in the United States, there exists a particular gap between the Japanese consumers' morality and their expected purchasing behavior. Considering it, we alert that autonomous vehicles may cause the social dilemma, and insist the need to pay more attention to this social dilemma when we design the AI algorithm or traffic laws.
    Date: 2018–01

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