nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒04‒23
two papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Product Availability Insight as an Omni Channel Strategy for Retailers By Marius Rob; Astrid Kemperman; Aloys Borgers
  2. Environmental attitudes and place identity as simultaneous determinants of preferences for environmental goods By Michela Faccioli; Mikołaj Czajkowski; Klaus Glenk; Julia Martin-Ortega

  1. By: Marius Rob; Astrid Kemperman; Aloys Borgers
    Abstract: The economic crises and growth of online shopping has led to increasing vacancy rates in Dutch shopping centers and a negative impact on shopping centers´ liveliness. However, nowadays, retailers have multiple channels to provide their consumers with a complete, so called omni channel, experience. The aim of the present study is to examine online product availability insight as an omni channel strategy for retailers to attract consumers to their offline shop.To measure and predict consumers’ preference for an online product availability insight a stated choice experiment was conducted. Hypothetical choice situations, including an online and offline channel, were created based on an experimental design. The online channel was described by the attributes delivery time, appointment, costs, and retour effort. For the offline channel travel time, friendliness of personnel, product availability insight, and personalized service were varied. For both channels product price was included. Moreover, product category (apparel (jeans) and electronics (hard disk)) and time constraints (with and without a time pressure) were used as context variables. The choice situations were presented within a web-based survey to 618 respondents during November 2015-January 2016 in the Netherlands.The data was analyzed by estimating Multinomial Logit (MNL) and Latent Class (LC) models. Results showed that the online product availability insight has significant influence on consumers’ channel choice decisions. Specifically, in case of a high involvement experience good (such as a jeans) consumers perceive this insight as useful. Furthermore the utilitarian related attributes, delivery time, costs, and travel time are important in channel choice decisions. However, friendly personnel in physical stores is an important factor when buying a jeans as well. In case of time pressure, consumers are willing to make more costs if it concerns a high involvement experience good. Furthermore, three segments were found for each product category, for jeans: offline shoppers, aversive shoppers, and multichannel shoppers, and for the hard disk they are: online shoppers, aversive shoppers, and offline shoppers.Based on the findings of this research, several managerial implications for retailers are given. A product availability insight would be an effective strategy for funneling consumers to the offline channel, especially when it concerns a high involvement experience good.
    Keywords: choice modeling; omni channel shopping; product availability insight; retailing; stated choice expriment
    JEL: R3
    Date: 2017–07–01
  2. By: Michela Faccioli (: Land, Environment, Economics and Policy Institute (LEEP), University of Exeter); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Klaus Glenk (Land Economy & Environment, Scotland’s Rural College); Julia Martin-Ortega (Sustainability Research Institute, University of Leeds)
    Abstract: Economic valuation is frequently employed to provide evidence of people's preferences for environmental goods. However, it is also often criticised for providing a simplified representation of preferences, with many factors that affect value formation not accounted for. This is the case of environmental attitudes and especially place identity perceptions, which have been largely overlooked in economic valuation, despite representing amongst the most important drivers of people's behaviour towards the environment, according to the environmental psychology and sociology literature. To address this gap, we designed and conducted a choice experiment where we explored the simultaneous role of environmental attitudes and place identity perceptions on willingness to pay (WTP), taking peatland restoration in Scotland as a case study. This study adds to the existing literature in that no valuation study to date has simultaneously integrated both aspects in preference modelling. Given that both factors are potentially strong drivers of preferences, focusing only on one or the other provides a partial picture of the determinants of WTP. Moreover, we do not just look at 'generic' environmental attitudes, but also at ‘specific’ environmental attitudes. Our results, estimated through a novel and econometrically robust approach based on the hybrid choice model, show that people with more positive environmental attitudes and those who feel attached to Scotland and think that peatlands are an important part of Scotland's identity and landscape tend to display higher WTP. These findings are important to provide a richer understanding of the determinants of preferences for environmental goods. Our results also open up new insights to the discipline in relation to the spatial heterogeneity of preferences: we have shown that people do not only relate with the space around them by focusing on the distance to the improvement site, as most frequently postulated in valuation studies. The idea that place can be understood as a space with emotional and cultural meanings also plays a critical role in shaping preferences. All these are critical elements to better inform policy-makers in the design of more socially acceptable and effective environmental policies.
    Keywords: environmental valuation, discrete choice experiment, environmental attitudes, place identity, hybrid choice models, peatlands, Scotland
    JEL: Q51 D6 D91 Q20
    Date: 2018

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