nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2019‒01‒21
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Estimation of Logit and Probit models using best, worst and best-worst choices By Paolo Delle Site; Karim Kilani; Valerio Gatta; Edoardo Marcucci; André De Palma
  2. Where do you sell your products online? A seller perspective on online shopping platforms By Lee, Saerom; Ryu, Min Ho; Lee, Sang Yup; Kwak, Dong-Heon
  3. Le comportement des citoyens face aux questions environnementales : cas de service des déchets urbains en Algérie By Djemaci, Brahim
  4. Willingness to Adopt Warm Season Grasses by Tennessee Beef Cattle Operators By Ren, Yongwang; Lambert, Dayton; Clark, Chris; Boyer, Chris; Griffith, Andrew; English, Burt,; Smith, Aaron; Menard, Robert; Walker, Forbes; Keyser, Patrick
  5. On the role of probability weighting on WTP for crop insurance with and without yield skewness By Douadia Bougherara; Laurent Piet

  1. By: Paolo Delle Site; Karim Kilani (LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM]); Valerio Gatta; Edoardo Marcucci; André De Palma (ENS Cachan - École normale supérieure - Cachan)
    Abstract: The paper considers models for best, worst and best-worst choice probabilities, that use a single common set of random utilities. Choice probabilities are derived for two distributions of the random terms: i.i.d. extreme value, i.e. Logit, and multivariate normal, i.e. Probit. In Logit, best, worst and best-worst choice probabilities have a closed form. In Probit, worst choice probabilities are simply obtained from best choice probabilities by changing the sign of the systematic utilities. Strict log-concavity of the likelihood, with respect to the coefficients of the systematic utilities, holds, under a mild necessary and sufficient condition of absence of perfect multicollinearity in the matrix of alternative and individual characteristics, for best, worst and best-worst choice probabilities in Logit, and for best and worst choice probabilities in Probit. The assumption of substitutability between best and worst choices is tested with data on mode choice, collected for the assessment of user responses to urban congestion charging policies. The numerical results suggest significantly different preferences between best and worst choices, even accounting for scale differences, in both Logit and Probit models. Worst choice data exhibit coefficient attenuation, less pronounced in Probit than in Logit, and higher mean values of travel time savings with larger confidence intervals.
    Keywords: Logit,Probit,Congestion charge,Strict log-concavity,Random utility model,Best-worst choices
    Date: 2018–12–13
  2. By: Lee, Saerom; Ryu, Min Ho; Lee, Sang Yup; Kwak, Dong-Heon
    Abstract: With the rapid development of information and communication technologies, various online shopping platforms have emerged. To understand the success of platform strategies, it is important to verify the features that are important to attract sellers. To estimate the economic value of free platforms for sellers, we try to estimate the willingness to pay (WTP) for each feature. Based on the features provided by Naver Smart Store (, we conduct a conjoint analysis. Notably, since Naver Smart Store platform provides the platform service for free to sellers as an open platform strategy, we can anticipate that the results of this research will reveal the value of an open platform strategy.
    Keywords: Digital Platform,Online Platform Strategies,Commerce Market,Conjoint Analysis,Willingness to Pay
    Date: 2018
  3. By: Djemaci, Brahim
    Abstract: We used the contingent valuation method to determine and analyze the factors that influence citizens' behavior regarding environmental issues related to the service of urban waste in Algeria via the willingness to pay (WTP). Two surveys were conducted, one aimed at assessing how the decision to participate financially in a waste management program differs between respondents in relation to socio-professional characteristics. The other survey seeks to answer a problem related to the effort made by the consumer to sort his packaging waste and especially plastic bottles through a deposit system. The results reveal that the significant factors determining the decision of the WTP are in addition to the socioprofessional variables of the individuals, the type of dwelling and the distance compared to the discharge, the place of residence and the implication in associative movements.
    Keywords: willingness to pay, waste management, contingent valuation method, deposit-refund system.
    JEL: Q5 Q51
    Date: 2018–10–12
  4. By: Ren, Yongwang; Lambert, Dayton; Clark, Chris; Boyer, Chris; Griffith, Andrew; English, Burt,; Smith, Aaron; Menard, Robert; Walker, Forbes; Keyser, Patrick
    Keywords: Farm Management, Land Economics/Use
    Date: 2019
  5. By: Douadia Bougherara (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Laurent Piet (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)
    Abstract: A growing number of studies in finance and economics seek to explain insurance choices using the assumptions advanced by behavioral economics. One recent example in agricultural economics is the use of cumulative prospect theory (CPT) to explain farmer choices regarding crop insurance coverage levels (Babcock, 2015). We build upon this framework by deriving willingness to pay (WTP) for insurance programs under alternative assumptions, thus extending the model to incorporate farmer decisions regarding whether or not to purchase insurance. Our contribution is twofold. First, we study the sensitivity of farmer WTP for crop insurance to the inclusion of CPT parameters. We find that loss aversion and probability distortion increase WTP for insurance while risk aversion decreases it. Probability distortion in losses plays a particularly important role. Second, we study the impact of yield distribution skewness on farmer WTP assuming CPT preferences. We find that WTP decreases when the distribution of yields moves from negatively- to positively-skewed and that the combined effect of probability weighting in losses and skewness has a large negative impact on farmer WTP for crop insurance.
    Keywords: Crop Insurance,Cumulative Prospect Theory,premium subsidy,skewness
    Date: 2018–12–07

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