nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒09‒17
nine papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  2. Investigating attribute non-attendance effects in conjoint analysis methods performance: Choice experiment, ranking conjoint analysis and best worst scaling. By Yangui, A.; Akaichi, F.; Gil, J.M.
  3. Operationalization of ecosystem services for choice experiments: the effect of relevance in the valuation of agrienvironmental policies By Tienhaara, Annika; Ahtiainen, Heini; Pouta, Eija
  4. Smokers’ Rational Lexicographic Preferences for Cigarette Package Warnings: A Discrete Choice Experiment with Eye Tracking By Jeffrey E. Harris; Mariana Gerstenblüth; Patricia Triunfo
  5. Hamiltonian Sequential Monte Carlo with Application to Consumer Choice Behavior By Martin Burda; Remi Daviet
  6. Assessing Farmers’ Preferences To Participate In Agri-environment Policies In Thailand By Kanchanaroek, Yingluck; Aslam, Uzma
  7. Information, retail channel and consumers WTP for food safety in Argentina By Berges, Miriam; Casellas, Karina; Echeverría, Lucía; Urquiza Jozami, Gonzalo
  8. Willingness to pay for improved irrigation water supply reliability: An approach based on probability density functions By Guerrero-Baena, Maria Dolores; Villanueva, Anastasio J.; Gómez-Limóna, José A.; Glenk, Klaus
  9. Consumer preferences of sustainability labeled cut roses in Germany By Berki-Kiss, D.; Menrad, K.; Lampert, P.

  1. By: Karavolias, Joanna; House, Lisa; Haas, Rainer; Briz, Teresa
    Abstract: Genetically modified organisms (GMOs) have been present within the food industry for years. Past research focuses on consumer’s willingness to pay for GMOs based on labels, and perceived risks and benefits. An online survey with a choice experiment will estimate different willingness to pay estimates for various producers and uses in the US, Germany and Spain. Respondents were divided into five treatment groups and presented with various uses of biotechnology. The choice experiment included price, producer and seedless as attributes for a pound of oranges. Results showed that respondents in all countries required a discount to purchase oranges produced with biotechnology regardless of information treatment or producer type. The discount rate was consistently larger for German participants than US or Spanish participants.
    Keywords: Consumer/Household Economics, Demand and Price Analysis
    Date: 2017–08–28
  2. By: Yangui, A.; Akaichi, F.; Gil, J.M.
    Abstract: This paper addresses a set of methodological questions. First, it assesses the variation of the level of ANA in different non-hypothetical CA formats. Second, it explores whether asking respondents to report the attributes they ignored after each choice set or at the end of the choice task yield comparable results. Lastly, it explores the implications of taking into account ANA information on respondents’ willingness to pay and on the external predictive powers of the estimated parameters. To answer these research questions, three treatments were carried out, non-hypothetical CE (NHCE), non-hypothetical RCA (NHRCA) and nonhypothetical BWS (NHBWS). The results reveal that taking into account ANA information significantly improved the goodness-of-fit of the estimated models, especially when full ranking information is considered as NHRCA and NHBWS. In term of marginal WTP estimates, the results show neither of the two ANA approaches appears to be a clear winner. Also, our results show that taken into account ANA information not seem to improve significantly the predictive power of estimated parameters.
    Keywords: Agricultural and Food Policy, International Relations/Trade
    Date: 2018–07
  3. By: Tienhaara, Annika; Ahtiainen, Heini; Pouta, Eija
    Abstract: Valuing ecosystem services with stated preference methods requires operationalizing these services for the purposes of the survey. This study presents a process for selecting agricultural ecosystem services for attributes of a choice experiment and analyzes how the relevance of these attributes affects respondents’ preferences, allowing for individual preference and scale heterogeneity. The results show that a non-significant cost attribute is associated with low relevance of the attributes, and that respondents who consider the attributes relevant have less uncertainty in their answers. The findings emphasize the importance of attribute selection when the object of the valuation is complex, such as certain ecosystem services.
    Keywords: Consumer/Household Economics, Demand and Price Analysis
    Date: 2017–08–28
  4. By: Jeffrey E. Harris; Mariana Gerstenblüth; Patricia Triunfo
    Abstract: We asked 97 cigarette smokers to make a series of 12 binary choices between experimental cigarette packages with varying warnings and background colors. Each smoker had to decide which of the two packages contained cigarettes less risky for his health. We tested whether the smokers, confronted with warnings that were repugnant and threatening to many of them, could still make choices that adhered to the standard axioms of rational choice. We supplemented our observations on smokers’ choices with data on their eye movements. We find that participants universally made choices consistent with a complete, transitive preference ordering. We find little evidence of inconsistent choices violating the weak axiom of revealed preference. In a majority of smokers, we find strong evidence of the use of a lexicographic decision rule to assess the riskiness of a cigarette package. These smokers first ranked the two packages solely on the basis of their warnings. Only when the two packages had the same warning did they rank the packages on the basis of their color. The data on eye tracking strongly confirmed the lexicographic nature of the underlying decision rule. Our study represents an entirely different angle of inquiry into the question of rational addiction.
    JEL: D12 D83 D87 D91 I12 M31
    Date: 2018–08
  5. By: Martin Burda; Remi Daviet
    Abstract: Practical use of nonparametric Bayesian methods requires the availability of efficient algorithms for implementation for posterior inference. The inherently serial nature of Markov Chain Monte Carlo (MCMC) imposes limitations on its efficiency and scalability. In recent years there has been a surge of research activity devoted to developing alternative implementation methods that target parallel computing environments. Sequential Monte Carlo (SMC), also known as a particle filter, has been gaining popularity due to its desirable properties. SMC uses a genetic mutation-selection sampling approach with a set of particles representing the posterior distribution of a stochastic process. We propose to enhance the performance of SMC by utilizing Hamiltonian transition dynamics in the particle transition phase, in place of random walk used in the previous literature. We call the resulting procedure Hamiltonian Sequential Monte Carlo (HSMC). Hamiltonian transition dynamics has been shown to yield superior mixing and convergence properties relative to random walk transition dynamics in the context of MCMC procedures. The rationale behind HSMC is to translate such gains to the SMC environment. We apply both SMC and HSMC to a panel discrete choice model with a nonparametric distribution of unobserved individual heterogeneity. We contrast both methods in terms of convergence properties and show the favorable performance of HSMC.
    Keywords: Particle filtering, Bayesian nonparametrics, mixed panel logit, discrete choice
    JEL: C11 C14 C15 C23 C25
    Date: 2018–09–12
  6. By: Kanchanaroek, Yingluck; Aslam, Uzma
    Abstract: Incentive based policies can play an important role in improve agricultural sustainability. This paper applies a Choice Experiment approach to elicit small scale farmers’ preferences for a potential policy scheme. Latent class models were used to analyse the farmers’ responses to investigate their preferences, heterogeneity in preferences and the willingness to accept compensations. The results revealed that farmers are willing to participate however; overall they show an aversion to drastic changes in their farming activities. The analysis suggested that majority of the farmers preferred schemes with shorter contract lengths and moderate reduction in chemical use. Furthermore, the study also informs policy makers by identifying the farm and farmer characteristics that influence farmers’ behaviour.
    Keywords: Community/Rural/Urban Development
    Date: 2017–08–29
  7. By: Berges, Miriam; Casellas, Karina; Echeverría, Lucía; Urquiza Jozami, Gonzalo
    Abstract: In Argentina, the incidence of hemolytic uremic syndrome (HUS) is high, with approximately 420 new cases observed each year. A strain called VTEC 0157 of Escherichia coli (E. coli) was identified as the primary cause of HUS. The retail sale of beef in Argentina is marketed mainly without labels, brands or certifications, in butchers shops that represent 75% of the market share. In the context of the Healthy Butchers program, bacteriological evaluations at butcher shops detected cross contamination of food with pathogens in beef retail environment. In this paper, we measure consumer preferences for selected food safety attributes in beef and butcher shops, taking their information and knowledge about safety into account. We use a discrete choice experiment to assess consumers WTP using primary data from Buenos Aires, Argentina. Results suggest that consumers' utility increases when there is a cashier at the butcher shop, the butcher wears gloves and uses recommended tables to cut meat, and beef products have a properly lay out at meat display fridge at consumers' sight. Consumers' knowledge and information about foodborne diseases and beef contamination risks increase the WTP for safety attributes at butcher shops. This effect is especially stronger for the last two mentioned attributes, which require a more detailed observation from consumers. Implications for food retail managers and policy-makers are discussed.
    Keywords: Preferencias del Consumidor; Seguridad Alimentaria; Atributos de Calidad; Disposición a Pagar; Carne; Modelo de Elección Discreta;
    Date: 2018–08
  8. By: Guerrero-Baena, Maria Dolores; Villanueva, Anastasio J.; Gómez-Limóna, José A.; Glenk, Klaus
    Abstract: In irrigated agricultural systems, the main source of uncertainty to irrigators relates to water supply, as it significantly affects farm income. This paper investigates farmers’ utility changes associated with shifts in the probability density function of water supply leading to a higher water supply reliability (higher mean and lower variance in annual water allotments). A choice experiment relying on a mean-variance approach is applied to the case study of an irrigation district of the Guadalquivir River Basin (southern Spain). To our knowledge, this is the first study using parameters of these probability density functions of water supply as choice experiment attributes to value water supply reliability. Results show that there are different types of farmers according to their willingness to pay (WTP) for improvements in water supply reliability, with some willing to pay nothing (44.9%), others (28.6%) with relatively low WTP, and the remainder of farmers (26.5%) having high WTP. A range of factors influencing farmers’ preferences toward water supply reliability are revealed, with those related to risk exposure to water availability being of special importance. The results will help to design more efficient policy instruments to improve water supply reliability in semi-arid regions.
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy
    Date: 2018–09–01
  9. By: Berki-Kiss, D.; Menrad, K.; Lampert, P.
    Abstract: The study investigated preferences of consumers of food retailing outlets in Germany for sustainability labeled cut roses. A sample of 1,201 respondents of an online survey was used to analyze their preferences based on a conjoint experiment in which a bunch of ten roses was considered which differed concerning the labeling certificate, country of production of the plants, price, packaging, smell and blossom size of the roses. Latent class analysis revealed existence of consumer heterogeneity with around two thirds of the respondents being strongly in favor of sustainability labels. Thereby Fairtrade labeled roses got an overall positive assessment whereby organic roses were only preferred by 31% of the respondents. In addition, paper or no packaging, strong smell and uniform big blossom sizes got overall positive consumer evaluations in the experiment. The study concludes that sustainability labeled plants might be an option for producers to append additional value to horticultural products in Germany.
    Keywords: Agricultural and Food Policy, Crop Production/Industries
    Date: 2018–07

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