nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒10‒22
eleven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Saving the breeds: German Farmers’ preferences for Endangered Dairy Breed conservation programs By Julia Anette Schreiner
  2. Empirical Research in Foreign Cultures: The Case of Japanese Rice By Oliver Meixner; Magdalena Kubinger; Parissa Haghirian; Rainer Haas
  3. When does real become consequential in non-hypothetical choice experiments? By Chavez, Daniel E.; Palma, Marco A.; Nayga Jr., Rodolfo M.
  4. Heterogeneous preferences and the individual change to alternative electricity tariffs By Ziegler, Andreas
  5. An Analysis of the Specialty Egg Market: Hedonic Price with Fixed Brand Effects vs. Random Coefficient Discrete Choice Models By Mojduszka, Eliza M.
  6. Tennessee Beef Cattle Farmers’ Preferences Regarding Marketing Tennessee Certified Beef By Jensen, Kimberly L.; Griffith, Andrew P.; DeLong, Karen L.; McLeod, Elizabeth M.
  7. Willingness to Pay for Senior Wellness Center By Kornprom Satraphand; Supeecha Panichpathom
  8. The willingness to pay and the attributes preferences on hotel choice decisions. By Ratthapoom Wongpradu; Supeecha Panichpathom
  9. Conditional Independence in a Binary Choice Experiment By Nathaniel T. Wilcox
  10. Location type choice for face-to-face interactions in business centers By Minou Weijs-Perrée; Rianne Appel-Meulenbroek; Theo Arentze
  11. Experimental and non-experimental evidence on limited attention and present bias at the gym By Muller, Paul; Habla, Wolfgang

  1. By: Julia Anette Schreiner
    Abstract: Animal genetic diversity is a unique and irreplaceable heritage. Globally, about 20 % of all breeds or livestock populations are considered to be ‘at risk’ and 9 % are already extinct. On farm, the concentration on elite breeding lines has endangered a number of alternative breeds. In Germany, over half of the entire dairy cattle population belongs to only three dominant breeds. Although several alternative breeds are well known for superior functional characteristics like e.g. a good fertility, an excellent udder health, and their ability to adapt to diverse environments, they are increasingly replaced by Holstein cows due to higher milk performances. To design effective incentive schemes that encourage farmers to maintain desired breeds, it is crucially important to know about their preferences for certain contract components. A discrete choice experiment (DCE) with 160 dairy cattle breeders revealed determinants of farmers’ willingness to accept conservation contracts to conserve rare German cattle breeds like Red dual-purpose cattle or Angler cattle. We included attributes like the monitoring of pairing, requirements for the keeping conditions, a collective bonus for an increase in population by five percent and the contract length in our experimental design. A Random Parameter Logit (RPL) model revealed that farmers favor shorter contracts (one or five years), a bonus for a population increase and the requirement of outdoor access. In contrast, farmers rather reject to choose a contract that requires participation in a breeding program and the prohibition of slatted floors. Two distinctive classes of farmers can be identified based on the results of a Latent Class Model (LCM). Organic farmers are generally less likely to join a program and are even more disapproving contracts where the pairing is monitored by the breeding association. However, it seems that program requirements should not be too restrictive on the farm management and rather focus on the compensation of associated income loss.
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance
    Date: 2018–10–01
  2. By: Oliver Meixner; Magdalena Kubinger; Parissa Haghirian; Rainer Haas
    Abstract: Within the study, we show that it is quite demanding to conduct consumer surveys abroad, in particular, if the targeted society differs in so many ways from the one of the home market. The results of a study are presented analyzing consumer behavior in the Japanese rice market. We evaluated the preferences of Japanese consumers in rice. Amongst others, focus was set on origin (which is actually a prominent attribute in Western European food markets). To approximate the impact of relevant attributes influencing consumers’ purchasing decision (origin, brand, quality seals and price), a discrete choice experiment was conducted with Japanese consumers, mainly living in urban areas.
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance
    Date: 2018–10–01
  3. By: Chavez, Daniel E.; Palma, Marco A.; Nayga Jr., Rodolfo M.
    Abstract: The proneness of stated preference choice experiments to hypothetical bias has increased the popularity of incentivized or real discrete choice experiments (RDCE). One challenge that practitioners face when designing RDCE is that some of the product alternatives may not be available for the study. To avoid deception, researchers should truthfully inform respondents that only a certain percentage of the product alternatives is available for the experiment. But would the proportion of available products influence the results of the RDCE? Using an induced value choice experiment, we varied the number of potentially binding alternatives in four treatments: 0%, 33%, 66%, and 100% to assess the effect of availability of product alternatives on choice behavior. We designed the induced value experiment with a profit maximization optimal strategy for agents (i.e., with a unique known profit-maximizing alternative). Our results suggest that incentives matter in that the percentage of optimal choices was lowest in the 0% treatment. Interestingly, however, we did not find statistically significant differences in amount of optimal choices in the 33%, 66%, and 100% treatments, suggesting that one could conduct an incentivized RDCE without the need to have all the product alternatives be made available in the study.
    Keywords: Institutional and Behavioral Economics, Marketing
    Date: 2017
  4. By: Ziegler, Andreas
    Abstract: Based on data from a large-scale computer-based survey among more than 3700 German citizens, this paper empirically examines the determinants of the general change of electricity tariffs and the specific change to green tariffs. Our econometric analysis with binary probit and multinomial logit models reveals a strong relevance of behavioral factors and individual values. For example, patience (which is measured by an incentivized experiment that was included in the survey) is significantly positively correlated with general changes to alternative electricity tariffs. Furthermore, social preferences (also measured by an incentivized experiment) and trust have an even stronger significantly positive effect on the specific change to green electricity tariffs. Our estimation results also imply an important role of political identification, i.e. citizens with a left-wing orientation significantly more often switch an electricity tariff and an ecological political orientation has a strong significantly positive effect on the change to a green electricity tariff. Furthermore, several socio-demographic and socio-economic variables like age, gender, or household income are also relevant. The empirical analysis thus provides new explanation patterns for the phenome-non that only a small number of households regularly change their electricity tariff and specifically to green tariffs, although they have high stated preferences for such changes. Our insights suggest several directions for policy, but also for electricity providers, to in-crease these switching rates. For example, the high importance of trust attitudes for the change to green electricity tariffs suggests a transparency initiative of electricity providers to decrease reservations against green power.
    Keywords: Switching electricity tariffs,green electricity,heterogeneous preferences,behavioral factors,artefactual field experiment,individual values,econometric analysis
    JEL: C93 D12 Q41 Q42 Q50
    Date: 2018
  5. By: Mojduszka, Eliza M.
    Keywords: Industrial Org./Supply Chain Management, Food and Agricultural Policy Analysis, Research Methods/Econometrics/Stats
    Date: 2018–06–20
  6. By: Jensen, Kimberly L.; Griffith, Andrew P.; DeLong, Karen L.; McLeod, Elizabeth M.
    Abstract: There is considerable farmer interest in finishing cattle and selling them through a Tennessee Certified Beef (TCB) Program. Given this level of interest, it is helpful to better understand how beef cattle farmers might prefer to sell their TCB cattle (e.g., private contracts, marketing cooperative, processing cooperative). This study uses a multinomial logit model and data from a 2016 beef cattle farmer survey to estimate influences on the probability of selecting a particular marketing arrangement. The most commonly selected marketing arrangement was a processing cooperative (42.99 percent), followed by a marketing cooperative (38.55 percent), and private contracting (18.46 percent).
    Keywords: Agribusiness, Marketing
    Date: 2018–01–04
  7. By: Kornprom Satraphand; Supeecha Panichpathom
    Abstract: Although Thailand is a developing country, it is well equipped for medical care. Nowadays, Thai people have a better quality of life and step into senior society, which makes it necessary to study the needs of the elderly in various aspects including their preferences of using wellness center. Past studies have focused on medical therapeutic health care rather than preventive health care. Therefore, it is crucial to study wellness center characteristics preferred by the elderly as well as willingness to pay of each group. Location, staffs, facilities, design, and accessibility are the main senior wellness center attributes extracted from triangulation. Willingness to pay analysis of 471 respondents from 50 to 79 years old shows that recreational center with safety concern design, skillful staffs, located in quality environment, and accessible via public transportation are the most valued characteristics of senior wellness center. There are 3 groups of the respondents: (1) Fit & Cozy Pre-Senior (2) Recreation & Cozy Senior (3) Recreation & Green Pre-Senior. For future research, data collection in different seasons can be useful to test the validity of senior wellness center attributes and levels. Exploring the needs and willingness to pay of LGBTQ elderly and senior consumer behavior in health care services can be valuable information for real estate developers.
    Keywords: Conjoint Analysis; Design; Facilities; Segmentation; Staffs
    JEL: R3
    Date: 2018–01–01
  8. By: Ratthapoom Wongpradu; Supeecha Panichpathom
    Abstract: A fast-growing number of small and medium size hotels in Thailand leads to a fierce competition within hotel industry. Old strategies such as price cutting may be obsolete. Needs of niche customers must be identified in order to target the right market and to employ the limited resource with correspond strategies. Thus, this paper aims to examine the preferred attributes on hotel choice decisions for Thai baby boomer travelers. Conjoint analysis technique was applied to explore how qualified respondents perceive the relative importance of cleanliness, monetary value, sleep quality, location, facilities, and amenities quality in the selection of small and medium hotels under the operation of Small and Medium Enterprise (SME) entrepreneurs. Despite the complication in collecting the samples of the technique, an innovative board game is created correspondingly to simplify the process and to visually mimic the trade-off situation in a process of consumer's evaluation. The findings suggest that application of the most preference profile card: Clean bed, Free Breakfast, Adjustable temperature, Green Environment, Fast-heated water heater should be put in priority in regard to the willingness to pay. SME hotel entrepreneurs targeting baby boom traveler could adjust the attributes to the outcomes accordingly in order to be competitive.
    Keywords: Baby boomers; Board Game; Conjoint Analysis; Hotel; Willingness to pay
    JEL: R3
    Date: 2018–01–01
  9. By: Nathaniel T. Wilcox (Economics Science Institute, Chapman University)
    Abstract: Experimental and behavioral economists, as well as psychologists, commonly assume conditional independence of choices when constructing likelihood functions for structural estimation. I test this assumption using data from a new experiment designed for this purpose. Within the limits of the experiment’s identifying restriction and designed power to detect deviations from conditional independence, conditional independence is not rejected. In naturally occurring data, concerns about violations of conditional independence are certainly proper and well-taken (for well-known reasons). However, when an experimenter employs contemporary state-of-the-art experimental mechanisms and designs, the current evidence suggests that conditional independence is an acceptable assumption for analyzing data so generated.
    Keywords: Alternation, Conditional Independence, Choice Under Risk, Discrete Choice, Persistence, Random Lottery Incentive, Random Lottery Selection, Random Problem Selection, Random Round Payoff
    JEL: C22 C25 C91 D81
    Date: 2018
  10. By: Minou Weijs-Perrée; Rianne Appel-Meulenbroek; Theo Arentze
    Abstract: As business centers offer shared workspaces and facilities to multiple organizations, it is expected that these organizations interact more frequently with each other. More empirical research is needed on where these interactions take place in business centers and how this behavior is influenced. Therefore, the aim of this study is to analyze the location choice for face-to-face interactions of business center users. Data collected by means of a questionnaire and an Experience Sampling Method (ESM), was analyzed using a Mixed Multinomial Logit Model (MMNL). Results showed that inter-organizational interactions take place less frequently at workspaces or formal meeting spaces and more frequently at shared spaces such as the coffee corner, café/restaurant/canteen or at other informal spaces. These interactions are also more likely to be influenced by features of the physical work environment, as these interactions were found to be mainly coincidental compared to the intra-organizational interactions. These findings could help office designers with regard to stimulating face-to-face interactions among organizations in business centers.
    Keywords: business center; Experience Sampling Method; face-to-face interaction; location choice; Physical Work Environment
    JEL: R3
    Date: 2018–01–01
  11. By: Muller, Paul; Habla, Wolfgang
    Abstract: We show that limited attention and present bias contribute to low levels of exercise. First, in a large randomized experiment, we find that email reminders increase gym visits by 13 % and that they benefit nearly all types of individuals. Limited attention can explain these effects. Second, using a novel dataset, we find that many bookings for gym classes are canceled, and that bookings are made even for classes that never have a waiting list. Comparing these findings to the predictions of a dynamic discrete choice model, we conclude that many gym members use bookings to commit themselves to future attendance.
    Keywords: health behavior,randomized experiment,reminders,nudging,habit formation,limited attention,time inconsistency
    JEL: C93 D91 I12
    Date: 2018

This nep-dcm issue is ©2018 by Edoardo Marcucci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.