nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2020‒04‒06
nine papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Understanding Heterogeneous Consumer Preferences in Chinese Milk Markets: A Latent Class Approach By Xiang Wu; Bin Hu; Jie Xiong
  2. Household heterogeneity in valuing electricity demand flexibility services By Melkamu Daniel , Aemiro Melkamu Daniel
  3. A Method to Estimate Discrete Choice Models that is Robust to Consumer Search By Jason Abaluck; Giovanni Compiani
  4. Infections, Accidents and Nursing Overtime in a Neonatal Intensive Care Unit: A Bayesian Semiparametric Panel Data Logit Model By Marc Beltempo; Georges Bresson; Jean-Michel Etienne; Guy Lacroix
  5. The Choice Architecture of School Choice Websites By Steven Glazerman; Ira Nichols-Barrer; Jon Valant; Jesse Chandler; Alyson Burnett
  6. Preferences for demand side management—a review of choice experiment studies By Gilbert Mbara
  7. 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.
  8. Success factors of innovations By Sterenn Lucas; Louis-Georges Soler; Etienne Rouvin
  9. Household fuel choice and use: A multiplediscrete-continuous framework By Melkamu Daniel , Aemiro

  1. By: Xiang Wu (HUST - Huazhong University of Science and Technology [Wuhan]); Bin Hu (HUST - Huazhong University of Science and Technology [Wuhan]); Jie Xiong (ESC Rennes School of Business)
    Abstract: We examine heterogeneous consumer preferences in Chinese milk markets. Using a discrete choice experiment, we examine how the brand, quality certification, traceability label and price influence consumers' milk choices. We identify four consumer segments using a latent class model: price conscious (9.8%), balanced thinking (19.8%), health conscious (57.5%), and environment conscious (12.9%) consumers. These four segments have distinct preferences: price conscious consumers prefer green certification; balanced thinking consumers have the highest willingness to pay for traceability labels; health conscious consumers have strong brand awareness; and environment conscious consumers prefer organic certification and traceability labels and use price as a quality signal. Such diversity of consumer preference can be explained by four psychological factors: price consciousness, food safety concerns, health consciousness and environmental concerns.
    Keywords: Heterogeneous preference,psychological factors,milk consumption,latent class model,choice experiment,China
    Date: 2020
  2. By: Melkamu Daniel , Aemiro Melkamu Daniel (CERE - the Center for Environmental and Resource Economics)
    Abstract: In this paper, we seek to investigate heterogeneity in households’ valuation of electricity contract attributes that reflect demand-side flexibility in the Swedish residential sector. Using stated preference data generated from a choice experiment, we estimate a mixed logit model in willingness-to-pay space and derive individual-specific conditional mean valuations for contract attributes which include various load controls and distribution of electricity consumption information. We perform a posterior analysis and identify different segments based on the monetary values households attach to the contract attributes. We find that a large proportion of households asks for substantial compensation to accept various load controls and to share their electricity consumption information. However, some households are willing to share their electricity consumption information and ask for relatively lower compensation to allow load controls. We also find that some households that accept load controls at a relatively low compensation require a sizeable compensation to share their electricity consumption information, and vice versa. From the perspective of the contract providers, these findings suggest that information-optional contracts can generate more customers than contracts that bundle households’ consumption information with various load controls.
    Keywords: Choice experiment; demand flexibility; direct load control; electricity contract; household heterogeneity
    JEL: D12 Q41 Q48 Q51
    Date: 2020–03–27
  3. By: Jason Abaluck; Giovanni Compiani
    Abstract: We state a sufficient condition under which choice data alone suffices to identify consumer preferences when choices are not fully informed. Suppose that: (i) the data generating process is a search model in which the attribute hidden to consumers is observed by the econometrician; (ii) if a consumer searches good j, she also searches goods which are better than j in terms of the non-hidden component of utility; and (iii) consumers choose the good that maximizes overall utility among searched goods. Canonical models will be biased: the value of the hidden attribute will be understated because consumers will be unresponsive to variation in the attribute for goods that they do not search. Under the conditions above and additional mild restrictions, an alternative method of recovering preferences using cross derivatives of choice probabilities succeeds regardless of the search protocol and is thus robust to whether consumers are informed. The approach nests several standard models, including full information. Our methods suggest natural tests for full information and can be used to forecast how consumers will respond to additional information. We verify in a lab experiment that our approach succeeds in recovering preferences when consumers engage in costly search.
    JEL: C5 C8 C9 D0 D6 D8
    Date: 2020–03
  4. By: Marc Beltempo; Georges Bresson; Jean-Michel Etienne; Guy Lacroix
    Abstract: The paper investigates the effects of nursing overtime on nosocomial infections and medical accidents in a neonatal intensive care unit (NICU). The literature lacks clear evidence on this issue and we conjecture that this may be due to empirical and methodological factors. We thus focus on a single NICU, thereby removing much variation in specialty mixes such neonatologists, fellows, residents, nurse practitioners that are observed across units. We model the occurrences of both outcomes using a sample of 3,979 neonates which represents over 84,846 observations (infant/days). We use a semiparametric panel data Logit model with random coefficients. The non-parametric components of the model allow to unearth potentially highly non-linear relationships between the outcomes and various policy-relevant covariates. We use the mean field variational Bayes approximation method to estimate the models. Our results show unequivocally that both health outcomes are affected by nursing overtime. Furthermore, they are both highly sensitive to infant and NICU-related characteristics.
    Keywords: Neonatal Health Outcomes,Nursing Overtime,Semi-Parametric Panel Data Logit Model,Mean Field Variational Bayes,Random Coefficients,
    JEL: I1 J2 C11 C14 C23
    Date: 2020–03–26
  5. By: Steven Glazerman; Ira Nichols-Barrer; Jon Valant; Jesse Chandler; Alyson Burnett
    Abstract: The authors conducted a randomized factorial experiment to determine how displaying school information to parents in different ways affects what schools they choose for their children in a hypothetical school district.
    Keywords: School choice, choice architecture, nudge, Bayesian hierarchical model, information experiment, factorial experiment
  6. By: Gilbert Mbara (Faculty of Economic Sciences, University of Warsaw)
    Abstract: Primary commodity prices are generally determined in dual markets: a physical--spot market dominated by supplier--producers and a forward--futures market where consumers, producers and speculators interact. While the futures market operates on an almost continuous basis, the spot market only opens in predetermined short periods of time over which the state of supply and demand is revealed. This poses a challenge for the question of price dynamics: which market leads/follows and where does price discovery occur? We perform an empirical analysis using spot and futures coffee prices and find that most price information originates from the futures markets. Shocks to the spot price are quickly integrated into the market prices, with the effect of the shock quickly dying out or a new equilibrium being attained. A shock to the futures price almost always leads to a permanent change in prices leading to a new equilibrium.
    Keywords: Price transmission, futures markets, VECM, Cointegrated VARMA
    JEL: C5 C51 C58 C32 E32
    Date: 2020
  7. 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, consumer choice, complementarities, trade-offs,
    Date: 2019
  8. By: Sterenn Lucas; Louis-Georges Soler; Etienne Rouvin
    Abstract: The French seafood sector is currently confronted with increasing competition from imported products, price fluctuations and new challenges such as environmental issues. In the face of these issues, producers may not be able to meet consumer expectations, and new products intended to boost growth in the seafood sector may not succeed. To clarify the drivers of competitiveness in the seafood sector, a greater understanding of the success factors behind seafood innovation is needed. We use an original database obtained from the merger of two databases. We combine Mintel’s Global New Products Database, which identifies new products launched in France in 2010, 2011 and 2012, with consumption data spanning 2010 to 2014 from a household panel (Kantar). The data allow us to track the quantities of 246 new products purchased in the year after their launch. We run an ordered logit model to measure the impact of product, marketing and market variables on the probability of a product becoming successful. We identify three possibilities: success, i.e., the product is still on the market one year after its launch with an increased quantity; stagnation, i.e., the product is still on the market one year after its launch with a decreased quantity; and failure, i.e., the product is no longer on the market at all a year after its launch. We also run a Cox proportional hazards model with the products’ time on the market as the dependent variable. The model estimates the time that elapses before the product disappears. The results show that three kinds of factors influence competitiveness: firm characteristics (size, specialization), market economic situation and, to a lesser extent, the marketing process.
    Keywords: Innovation, measurement of success, seafood sector, ordered logit model, Cox model
    JEL: L1 Q31 L66 C25
    Date: 2020
  9. By: Melkamu Daniel , Aemiro (CERE - the Center for Environmental and Resource Economics)
    Abstract: This paper provides a joint analysis of multiple fuel types and use choices and explores the socio-demographic and housing characteristics that affect household fuel use decisions. Using household survey data from urban Ethiopia, this paper estimates a mixed multiple discretecontinuous extreme value (MMDCEV) model. The results indicate that households with a female head are more likely to combine traditional biomass fuels (firewood and charcoal) and electricity for different uses, while households with less-educated heads, larger families, and poorer living conditions (fewer rooms) tend to rely on traditional biomass fuels. The results also show that households with an individual electricity meter are significantly less likely to use charcoal. Further, the results show that the satiation effect from increased use of a fuel is relatively higher for firewood and lower for electricity. The findings in this paper can be useful to inform energy policy, including more effective targeting of subsidies for liquefied petroleum gas (LPG) purchases and private electricity meter installations, and for interventions that promote adoption of improved biomass cookstoves.
    Keywords: Energy expenditure; fuel choice; fuel substitution; multiple fuel use
    JEL: C25 D13 O13 Q23 Q42 R21
    Date: 2020–03–27

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