nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒12‒10
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Land Markets, Landslides and Social Norms: New Insights from a Discrete Choice Experiment By Mertens, Kewan; Vranken, Liesbet
  2. Improving Drinking Water Quality in South Korea: A Choice Experiment By Gschwandtner, A.
  3. Willingness to Pay for Certified Fresh Fruits in China: A Double-Hurdle Approach By Wang, L.
  4. Measuring Long-Run Price Elasticities in Urban Travel Demand By Donna, Javier D.
  5. Willingness to Pay and Willingness to Accept for Farmland Leasing and Custom Farming in Taiwan By Chang, T.; Takahashi, D.
  6. Unblurring the Market for Vision Correction: A Willingness to Pay Experiment in Rural Burkina Faso By Grimm, Michael; Hartwig, Renate

  1. By: Mertens, Kewan; Vranken, Liesbet
    Keywords: Community/Rural/Urban Development, Farm Management, Land Economics/Use, Risk and Uncertainty
    Date: 2018–12–04
  2. By: Gschwandtner, A.
    Abstract: Increased pollution leads to a constant decrease of drinking water quality worldwide. Due to safety concerns, unpleasant taste and odour only about 3% of the population in South Korea is drinking untreated tap water. The present study uses choice experiments and cost-benefit analysis to investigate the feasibility of installing advanced water treatments in Cheongju waterworks in South Korea. The waterworks is situated in the middle of the country and is providing more than half a million people with drinking water. The study shows that the lower bound of the median WTP for installing a new advanced water treatment system is about $ 2 US/month, which is similar to the average expenditures for bottled water per household in South Korea. Scenarios under which the instalment of the advanced water treatments is feasible are discussed together with environmental solutions in the long-run. Acknowledgement : The authors would like to thank Rob Fraser for setting the road map for this research. They would also like to thank Iain Fraser for his help with the design of the choice experiment and Korea-Water for sponsoring this project.
    Keywords: Resource/Energy Economics and Policy
    Date: 2018–07
  3. By: Wang, L.
    Abstract: The aim of the paper is to assess how consumers evaluate quality certificate and to what extent they are willing to pay a premium for fresh fruits with certificate. A double-hurdle model is applied to data obtained by interviewing 407 fresh fruit consumers in nine cities, China. Willingness-to-pay a premium was modeled as a function of a series of socio-economic variables, plus fruit attributes, perceptions on fruit safety, and risk attitudes. Results indicate that the most important factors influencing willingness to pay a premium involve in positive attitudes toward quality certificate, degree of attention to fruit safety, perception of importance on fruit attributes. The recorded consumer interest in safety and quality of fresh fruits reveals that a promising market for certified fruits could be developed by an adequate knowledge on fruit certificate and an effective market monitoring system. Acknowledgement : The research was funded by the China Agriculture Research System [grant numbers CARS-28]. The authors would like to thank the editor and anonymous reviewers for their constructive comments that greatly improved the manuscript.
    Keywords: Consumer/Household Economics
    Date: 2018–07
  4. By: Donna, Javier D.
    Abstract: This paper develops a structural model of urban travel to estimate long-run price elasticities. A dynamic discrete choice demand model with switching costs is estimated, using a panel dataset with public market-level data on automobile and public transit use for Chicago. The estimated model shows that long-run own- (automobile) and cross- (transit) price elasticities are more elastic than short-run elasticities, and that elasticity estimates from static and myopic models are downward biased. The estimated model is used to evaluate the response to a gasoline tax. Static and myopic models mismeasure long-run substitution patterns, and could lead to incorrect policy decisions.
    Keywords: Long-run price elasticities, Dynamic demand travel, Hysteresis
    JEL: L71 L91 L98
    Date: 2018–11–05
  5. By: Chang, T.; Takahashi, D.
    Abstract: The objective of this study is to analyze and compare the valuation of farmer participation in the farmland leasing market and the custom-farming services market. This study analyzes surveys on 301 rice farmers in Taiwan in 2014 using the contingent valuation method to analyze the willingness to pay and willingness to accept of both markets. The empirical analysis indicated that factors of greater significance causing reduced the WTA for lending farmland, which can reduce supply in the farmland-leasing market include the expectation of farmland diversion, and the existence of transaction costs in the farmland lending market. The analysis also indicates that an increase in the WTA price for lending farmland was a primary factor for the increase in the WTP for custom-farming services, which indicates that the vibrant growth of the custom-farming services market in Taiwan is affected by the WTA farmland lending. The findings show that development of the custom-farming services market cannot be expected to lead to greater farmland liquidation. Acknowledgement :
    Keywords: Land Economics/Use
    Date: 2018–07
  6. By: Grimm, Michael (University of Passau); Hartwig, Renate (University of Namur)
    Abstract: We assess the willingness to pay (WTP) for eyeglasses in an adult population in rural Burkina Faso using a variant of the Becker-DeGroot-Marschak (BDM) method. We combine the BDM approach with video and deferred payment options to analyze the role of information and liquidity constraints. Furthermore, we exploit variation in reservation and transaction prices to study potential screening and sunk cost effects. Our main results show that, consistent with the over-exclusion perspective documented for essential health products, the willingness to pay for glasses is low, amounting to 20% of the current market price. Information provided through a video raises the willingness to pay for corrective glasses by 16%. In contrast, deferred payment does not affect the willingness to pay. Finally, we find no evidence of screening or sunk cost effects. Overall our results lend support to subsidization of eyeglasses in a resource poor setting.
    Keywords: eyeglasses, information constraint, liquidity constraint, willingness to pay, Burkina Faso
    JEL: D11 D12 D83 I15
    Date: 2018–10

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