nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2020‒08‒24
eleven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Acceptance of national wind power development and exposure. A case-control choice experiment approach By Anders Dugstad; Kristine Grimsrud; Gorm Kipperberg; Henrik Lindhjem; Ståle Navrud
  2. A Dynamic Ordered Logit Model with Fixed Effects By Chris Muris; Pedro Raposo; Sotiris Vandoros
  3. Scalable Bayesian Estimation in the Multinomial Probit Model By Ruben Loaiza-Maya; Didier Nibbering
  4. Framing and signalling effects of taxes on sugary drinks: a discrete choice experiment among households in Great Britain By Cornelsen, Laura; Quaife, Matthew; Lagarde, Mylene; Smith, Richard D.
  5. Citizen Advisory Committees in the Contingent Valuation Method Process By Philippe Bance; Angélique Chassy
  6. Estimación y pronóstico de demanda de transporte urbano en la ciudad de Villa. By Walter Javier Romano; Juan José Pompilio Sartori
  7. Energy demand management and social norms – the case study in Poland By Bernadeta Gołębiowska; Anna Bartczak; Mikołaj Czajkowski
  8. Markov Chain Monte Carlo Procedure to Generate Revealed Preference Consistent Datasets By Thomas Demuynck
  9. Are Economists’ Preferences Psychologists’ Personality Traits? A Structural Approach By Tomáš Jagelka
  10. A Canon of Probabilistic Rationality By Simone Cerreia-Vioglio; Fabio Maccheroni; Massimo Marinacci; Aldo Rustichini
  11. Intelligent lockdown, intelligent effects? The impact of the Dutch COVID-19 ‘intelligent lockdown’ on gendered work and family dynamics among parents By Yerkes, Mara A.; André, Stéfanie; Beckers, Debby G. J.; Besamusca, Janna; Kruyen, Peter Mathieu; Remery, Chantal; van der Zwan, Roos; Geurts, Sabine

  1. By: Anders Dugstad; Kristine Grimsrud (Statistics Norway); Gorm Kipperberg; Henrik Lindhjem; Ståle Navrud
    Abstract: Despite a large stated-preference literature on wind power externalities, few SP studies employ a case-control approach to examine whether people´s acceptance of new wind power developments increases or decreases with exposure to and familiarity with wind turbines. Furthermore, the existing studies are inconclusive on this issue. In a case-control discrete choice experiment we measure the level of acceptance in terms of people´s willingness-to-accept compensation for having future landbased wind power developments in Norway; comparing exposed and non-exposed people’s WTA. We find that exposure lowers acceptance. Furthermore, exposed people are also unwilling to pay as much as non-exposed people to increase general domestic renewable energy production (from all sources), and thus have lower acceptance for such renewable energy policy initiatives. After testing for type of exposure, we argue that the inconclusiveness in the literature of how exposure affects acceptance of wind power developments could be due to the fact that impacts considered differs somewhat across studies.
    Keywords: Discrete Choice Experiment; exposure; wind power; willingness-to-accept; societal acceptance; familiarity
    JEL: Q48 Q51 Q57
    Date: 2020–06
  2. By: Chris Muris; Pedro Raposo; Sotiris Vandoros
    Abstract: We study a fixed-T panel data logit model for ordered outcomes that accommodates fixed effects and state dependence. We provide identification results for the autoregressive parameter, regression coefficients, and the threshold parameters in this model. Our results require only four observations on the outcome variable. We provide conditions under which a composite conditional maximum likelihood estimator is consistent and asymptotically normal. We use our estimator to explore the determinants of self-reported health in a panel of European countries over the period 2003-2016. We find that: (i) that the autoregressive parameter is positive and analogous to a linear AR(1) coefficient of about 0.25, indicating persistence in health status; (ii) that the association between income and health becomes insignicant once we control for unobserved heterogeneity and persistence.
    Keywords: panel data; ordered choice; health satisfaction
    JEL: C23 C25 I14
    Date: 2020–08
  3. By: Ruben Loaiza-Maya; Didier Nibbering
    Abstract: The multinomial probit model is a popular tool for analyzing choice behaviour as it allows for correlation between choice alternatives. Because current model specifications employ a full covariance matrix of the latent utilities for the choice alternatives, they are not scalable to a large number of choice alternatives. This paper proposes a factor structure on the covariance matrix, which makes the model scalable to large choice sets. The main challenge in estimating this structure is that the model parameters require identifying restrictions. We identify the parameters by a trace-restriction on the covariance matrix, which is imposed through a reparamatrization of the factor structure. We specify interpretable prior distributions on the model parameters and develop an MCMC sampler for parameter estimation. The proposed approach substantially improves performance in large choice sets relative to existing multinomial probit specifications. Applications to purchase data show the economic importance of including a large number of choice alternatives in consumer choice analysis.
    Keywords: multinomial probit model, factor analysis, parameter identification, spherical coordinates
    JEL: C11 C25 C35 C38
    Date: 2020
  4. By: Cornelsen, Laura; Quaife, Matthew; Lagarde, Mylene; Smith, Richard D.
    Abstract: Taxes on sugar-sweetened beverages (SSBs) are in place in many countries to combat obesity with emerging evidence that these are effective in reducing purchases of SSBs. In this study, we tested whether signalling and framing the price increase from an SSB tax explicitly as a health-related, earmarked measure reduces the demand for SSBs more than an equivalent price increase. We measured the demand for non-alcoholic beverages with a discrete choice experiment (DCE) administered online to a randomly selected group of n = 603 households with children in Great Britain (GB) who regularly purchase SSBs. We find a suggestive evidence that a price increase leads to a larger reduction in the probability of choosing SSBs when it is signalled as a tax and framed as a health-related and earmarked policy. Respondents who did not support a tax on SSBs, who were also more likely to choose SSBs in the first place, were on average more responsive to a price increase framed as an earmarked tax than those who supported the tax. The predictive validity of the DCE, to capture preferences for beverages, was confirmed using actual purchase data. The findings imply that a well-signalled and earmarked tax on SSBs could improve its effectiveness at reducing the demand.
    Keywords: demand analysis; discrete choice experiment; framing and signalling; sugar-sweetened beverage tax; United Kingdom; MR/L012324/1; MR/P021999/1; 1+3 Economic and Social Research Council studentship
    JEL: E6
    Date: 2020–07–07
  5. By: Philippe Bance (LC2S - Laboratoire caribéen de sciences sociales - UA - Université des Antilles - CNRS - Centre National de la Recherche Scientifique); Angélique Chassy (EM Normandie - École de Management de Normandie)
    Abstract: The Contingent Valuation Method (CVM) is a tool of economic analysis whose purpose is to measure, on the basis of individuals' stated preferences, the utility they attach to the production of public goods, thereby enabling a public decision-maker to arbitrate between different items of expenditure. The approach has been deployed as part of a centralist conceptual scheme that leaves little room for citizens in the decision-making process and is now being challenged by the increasing prominence of multilevel governance, particularly in Europe. The purpose of this article is to discuss the use in this context of citizen advisory committees (CACs) rather than the other participatory tools sometimes recommended in contingent valuation studies, such as citizen juries and the scenario workshop. It also discusses the limitations of the CAC/CVM combination in order to ensure that citizens' opinions are fully taken into account in the specification and implementation of public programmes.
    Keywords: Citizen participation,public goods,public decision-making,public management,valuation,willingness to pay
    Date: 2020
  6. By: Walter Javier Romano; Juan José Pompilio Sartori
    Abstract: Este estudio presenta estimaciones de modelos de elección discreta basados en una muestra de usuarios de transportes de la Ciudad de Villa Carlos Paz. Se presentan los resultados correspondientes a los viajes al trabajo. Se ha estimado un modelo logit multinomial y un logit multinomial mixto con parámetros aleatorios de elección de modo de transporte para viajar al lugar de trabajo con datos de preferencias declaradas. El estudio presenta, además, pronósticos de la cuota de mercado del uso de los diferentes modos de transporte, la valoración subjetiva de los ahorros de tiempo de viaje, tiempo de espera y cuadras caminadas en origen y destino al utilizar colectivo, como así también las elasticidades de demanda de la elección de modo de transporte ante la aplicación de políticas asociadas a cambios en algunas variables de nivel de servicio de los diferentes modos de transporte.
    Keywords: demanda de transporte; preferencias declaradas; logit multinomial; logit multinomial mixto, elasticidad de la demanda
    JEL: C35 R41
    Date: 2019–11
  7. By: Bernadeta Gołębiowska (Faculty of Economic Sciences, University of Warsaw); Anna Bartczak (Faculty of Economic Sciences, University of Warsaw); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw)
    Abstract: The study aims to investigate the impact of social norms and the financial motivation on the disutility of Polish households from energy management. We analyzed consumers’ preferences for the new Demand-Side Management (DSM) programs. We applied a choice experiment (CE) framework for various electricity contracts that implied external control of electricity usage. Based on the hybrid model, we proved that people with higher descriptive social norms about electricity consumption are less sensitive to the level of compensation and more responsive to the number of blackouts. People who stated they would sign the contract because of the financial reasons are less sensitive to the external control of electricity consumption. They are less inclined towards the status quo option. Poland’s energy policy focuses on energy efficiency, and reduction of greenhouse gas emissions. This study may contribute to understanding the decisions of households and provide insights into the DSM option in Poland.
    Keywords: choice experiment, demand-side management, electricity, social norms, willingness to accept
    JEL: C25 D19 D91 Q41 Q48
    Date: 2020
  8. By: Thomas Demuynck
    Abstract: This paper presents a Markov-Chain-Monte-Carlo (MCMC) procedure to sample uniformly from the collection of datasets that satisfy some revealed preference test. The MCMC combines a Gibbs-sampler with a simple hit and run step. It is shown that the MCMC has the uniform distribution as its unique invariant distribution and that it converges to this distribution at an exponential rate.
    Keywords: Revealed preference; Markov Chain Monte Carlo; Bronars Power
    JEL: C63 D11
    Date: 2020–08
  9. By: Tomáš Jagelka (ECONtribute Cluster of Excellence, IZA, Institute for Applied Microeconomics at the University of Bonn, and CEHD at the University of Chicago.)
    Abstract: This paper proposes a method for empirically mapping psychological personality traits to economic preferences. Careful modelling of random components of decision making is crucial to establishing the long supposed but empirically elusive link between economic and psychological systems for understanding differences in individuals’ behavior. I use factor analysis to extract information on individuals’ cognitive ability and personality and embed it within a Random Preference Model to estimate distributions of risk and time preferences, of their individual-level stability, and of people’s propensity to make mistakes. I explain up to 50% of the variation in both average risk and time preferences and in individuals’ capacity to make consistent rational choices using four factors related to cognitive ability and three of the Big Five personality traits. True differences in desired outcomes are related to differences in personality whereas actual mistakes in decisions are related to cognitive skill.
    Keywords: economic preferences, personality traits, decision error, measurement error, stochastic discrete choice
    JEL: D91 D80 D01
    Date: 2020–07
  10. By: Simone Cerreia-Vioglio; Fabio Maccheroni; Massimo Marinacci; Aldo Rustichini
    Abstract: We prove that a random choice rule satisfies Luce's Choice Axiom if and only if its support, the set of "alternatives that can be chosen," is a choice correspondence that satisfies the Weak Axiom of Revealed Preference, and random choice occurs according to a stochastic tie breaking among optimizers that satisfies Renyi's Conditioning Axiom. Our result shows that the Choice Axiom is, in a precise formal sense, a probabilistic version of the Weak Axiom. It thus supports Luce's view of his own axiom as a "canon of probabilistic rationality."
    Date: 2020–07
  11. By: Yerkes, Mara A.; André, Stéfanie; Beckers, Debby G. J.; Besamusca, Janna; Kruyen, Peter Mathieu; Remery, Chantal; van der Zwan, Roos; Geurts, Sabine
    Abstract: This study examines the impact of the Dutch ‘intelligent lockdown’ during the COVID-19 pandemic on work and family dynamics among parents. This ‘intelligent lockdown’ relied on a combination of restrictive measures and an emphasis on individual responsibility as a means of lessening the spread and health impact of the pandemic. However, the COVID-19 pandemic is more than a public health crisis. Lockdown measures had substantial societal effects, including a significant impact on parents with (young) children. Given gender inequality existent prior to the pandemic, the question arises to what extent the consequences of the lockdown varied for mothers and fathers. Using representative survey data gathered among Dutch parents in April 2020, we explore changes in three areas: paid work, the division of care and household work, and quality of life (leisure, work-life balance, relationship dynamics). Our linear probability and multinomial logistic models demonstrate that the way in which families were impacted by the COVID-19 pandemic reflects a complex gendered reality. We find that gender inequality patterns in the division of paid work, care work, and housework continue to exist. Moreover, the unique situation created by restrictive lockdown measures magnified some inequalities while others were lessened. We find evidence of increased gender inequality in relation to paid work and quality of life, yet a decrease in gender inequality in the division of care and household tasks. During the lockdown, Dutch fathers reported doing more care and household tasks than before. The insights provided here offer key comparative references for understanding the broader impact of lockdown measures on work and family dynamics, as well as quality of life as we move forward in the COVID-19 pandemic.
    Date: 2020–07–21

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