nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2020‒03‒02
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Stability and Evolution of Preferences for Improved Cookstoves -- A Difference-in-Difference Analysis of a Choice Experiment from Ethiopia By Dissanayake,Sahan T. M.; Voigt,George; Cooper, Abbie; Beyene, Abebe Damte; Bluffstone,Randall; Gebreegziabher,Zenebe; LaFave, Daniel; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
  2. Development of Utility Function for Vehicle Insurance: Comparison of Logarithmic Goal Programming Method and Conjoint Analysis Method By Natesan, Sumeetha R.; Dutta, Goutam
  3. Adding Carbon to the Equation in Online Flight Search By Amenta, Nina; Sanguinetti, Angela
  5. Partial Identification and Inference for Dynamic Models and Counterfactuals By Myrto Kalouptsidi; Yuichi Kitamura; Lucas Lima; Eduardo A. Souza-Rodrigues
  6. Consumer choices and demand for tilapia in urban Malawi: What are the complementarities and trade-offs? By Chikowi, Christopher T. M.; Ochieng, Dennis O.; Jumbe, Charles B. L.

  1. By: Dissanayake,Sahan T. M.; Voigt,George; Cooper, Abbie; Beyene, Abebe Damte; Bluffstone,Randall; Gebreegziabher,Zenebe; LaFave, Daniel; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
    Abstract: There is a growing effort in the non-market valuation literature toward better understanding of the stability and evolution of preferences over time. The study uses a novel approach combining a repeated choice experiment with a randomized controlled trial on stove adoption in Ethiopia to analyze the stability and evolution of preferences. The treatment group in the randomized controlled trial received an improved fuelwood stove with less fuelwood use, whereas the control group continued to use traditional cooking methods. Respondents were given the exact same choice questions in 2013 and 2016. The study began with 504 households in 36 communities in 2013, and 486 of the same households participated in 2016 (a 96 percent retention rate). The results show that preferences of the respondents from the control group are stable over the study period, while preferences of the respondents from the treatment group evolve. Moreover, households in the treatment group still using the stoves have significantly higher willingness to pay for all the stove's attributes in 2016 compared with 2013, indicating how longer experience can increase the willingness to pay for technology with environmentally preferable attributes.
    Keywords: Global Environment,Flood Control,Hydrology,Energy Demand,Energy and Environment,Energy and Mining,Health Care Services Industry
    Date: 2019–06–28
  2. By: Natesan, Sumeetha R.; Dutta, Goutam
    Abstract: The increase in competition among the vehicle insurance sectors has increased the number of policy options available in the market. This study focuses on the development of a utility function for these policies that will aid policy holders and potential investors in comparing them based on various attributes. A comparison of various vehicle insurance policies can help the customers to compare and choose a vehicle insurance that is suitable to them. Although there are several methods for developing a utility function, in this study, we intend to develop a linear utility model for vehicle insurance policies using two approaches: Logarithmic Goal Programming Model (LGPM) and Conjoint Analysis Method (CAM). We propose to compare the similarities and differences between the results obtained from LGPM and CAM approaches, used for developing the utility function for vehicle insurance policies. We also derive a choice probability of the vehicles insurance policies available in market by developing a multinomial logit choice model. We also study the consistency indicators of the respondents. We will provide useful insights for the use both approaches as research tools.
    Date: 2020–02–25
  3. By: Amenta, Nina; Sanguinetti, Angela
    Abstract: This study explores the potential to promote lower-emissions air travel by providing consumers with information about the carbon emissions of alternative flight choices in the context of online flight search and booking. Researchers surveyed over 450 UC Davis faculty, researchers, and staff, asking them to choose among hypothetical flight options for university-related business trips. Emissions estimates for flight alternatives were prominently displayed alongside cost, layovers and airport, and the lowest-emissions flight was labeled “Greenest Flight”. The researchers found an impressive rate of willingness to pay for lower-emissions flights: around $200/ton of CO2E saved, a magnitude higher than that seen in carbon offsets programs. They also found that displaying carbon information encouraged Davis employees to choose nonstop (lower-emissions) flights, when available, from a more distant airport over indirect flights from their preferred airport for medium-distance flights. In a second step of analysis, they estimated the carbon and cost impacts for UC Davis business travel if the university were to adopt a flight-search interface that prioritizes carbon emissions information and displays alternatives from multiple regional airports in their employee travel-booking portal. Based on the choice models from the survey data, a year’s worth of actual employee air travel data, and data collected on flight alternatives with respect to the flights chosen by employees, they estimated potential annual savings of more than 79 tons of CO2E, and a more impressive $56,000 reduction in airfare costs, due to an increased willingness of travelers to take advantage of cheaper (often nonstop) flight options out of SFO. Broader university policies encouraging lower-emissions flights and enhanced public transportation within the multi-airport mega-region would likely support much greater carbon savings. Institutionalizing this “nudge” within organizations with large travel budgets, like the UC system, could have an industry-wide impact in aviation. View the NCST Project Webpage
    Keywords: Engineering, Social and Behavioral Sciences, Carbon emissions, air travel, flight search, online travel booking, eco-feedback
    Date: 2020–02–01
  4. By: Jules Sadefo Kamdem (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier, UG - Université de Guyane); David Akame (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier)
    Abstract: This paper extends the work of Pindyck by taking into consideration a large class family of different utility functions of economic agents. As in Pindyck, instead of consideringa social utility function that is characterized by constant relative risk aversion (C.R.R.A), we use the expo-power utility function of Saha. In fact, depending on the choice of the expo-power utility function parameters, we cover a diverse range1of utility functions and besides covering the other utility functions that a C.R.R.A omits, Expo-power function permits usto discern if under the other behaviors of economic agents, the willingness to pay remainsmore affected by uncertain outcomes than certain outcomes, when we vary the expectationand standard deviation of the temperature distribution probability. Our paper has maintained the small-tailed gamma distributions of temperature and economic impact of Pindyck, notonly because they hinder infinite future welfare losses (for an exponential utility function), but because it is easy to change some moments of the distribution (jointly or holding the othersfixed) while studying how uncertainty influences the willingness to pay as explained in Pindyck.
    Keywords: Willingness to Pay,Climate Change,Expo-Power Utility,I.A.R.A,D.A.R.A,I.R.R.A,IA
    Date: 2020–01–24
  5. By: Myrto Kalouptsidi; Yuichi Kitamura; Lucas Lima; Eduardo A. Souza-Rodrigues
    Abstract: We provide a general framework for investigating partial identification of structural dynamic discrete choice models and their counterfactuals, along with uniformly valid inference procedures. In doing so, we derive sharp bounds for the model parameters, counterfactual behavior, and low-dimensional outcomes of interest, such as the average welfare effects of hypothetical policy interventions. We char- acterize the properties of the sets analytically and show that when the target outcome of interest is a scalar, its identified set is an interval whose endpoints can be calculated by solving well-behaved constrained optimization problems via standard algorithms. We obtain a uniformly valid inference pro- cedure by an appropriate application of subsampling. To illustrate the performance and computational feasibility of the method, we consider both a Monte Carlo study of firm entry/exit, and an empirical model of export decisions applied to plant-level data from Colombian manufacturing industries. In these applications, we demonstrate how the identified sets shrink as we incorporate alternative model restrictions, providing intuition regarding the source and strength of identification.
    JEL: C0 C1 F0 L0
    Date: 2020–02
  6. By: Chikowi, Christopher T. M.; Ochieng, Dennis O.; Jumbe, Charles B. L.
    Abstract: Despite concerted efforts to develop the fisheries sector in many developing countries, fish demand remains poorly understood due to weak and fragmented domestic markets, particularly in Africa south of the Sahara. An important area that affects the development of the fishery sector is limited understanding of how the choice between different fish products is affected by the socioeconomic characteristics of consumers, marketing factors and fish-specific attributes. Previous studies in Malawi have assessed consumer choice and demand for fish in general, without considering species-specific consumer choices. This paper analyzes consumer choices and demand for two species of tilapia, Lake Malawi Oreochromis (Nyasalapia) spp. (Ny) and Oreochromis shiranus (Os), in unprocessed and processed form, in urban Malawi. We use data collected from a sample of 584 urban households in Malawi’s two major cities, Blantyre and Lilongwe. Multivariate probit and seemingly unrelated regression models are employed to analyze the correlates of consumer choice and demand for tilapia products. Even though most consumers chose farmed tilapia (Os) over the wild tilapia (Ny), our results indicate trade-offs in choice but complementarities in demand for unprocessed and processed tilapia products. We find that the correlates of choice are not the same as correlates of demand for tilapia products. This is explained by heterogenous consumer profiles, market conditions, and tilapia trait descriptors. Developing robust tilapia value chains requires exploiting these complementarities and trade-offs, policy support to boost tilapia production, and reducing its relative caloric price to consumers. These measures will contribute to increased consumer demand. More generally fish breeding programs should also link breeding objectives to consumer choices and demand for fisheries’ products, particularly considering rarely examined fish at-tributes such as its nutritive value and body texture.
    Keywords: MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; fisheries; aquaculture; tilapia; trade; supply chain; fish farms; urban areas; fishery data; markets
    Date: 2019

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