nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2021‒06‒14
eight papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Do you prefer safety to social participation? Finnish population-based preference weights for the Adult Social Care Outcomes Toolkit (ASCOT) for service users By Nguyen, Lien; Jokimäki, Hanna; Linnosmaa, Ismo; Saloniki, Eirini Christina; Batchelder, Laurie; Malley, Juliette; Lu, Hui; Burge, Peter; Trukeschitz, Birgit; Forder, Julien
  2. Measuring consequentiality: A “Knife-Edge” versus Continuous Approach By Tanga M. Mohr; Peter A. Groothuis; John C. Whitehead; Kristan Cockerill; William P. Anderson, Jr; Chuanhui Gu
  3. Employers' Willingness to Invest in the Training of Temporary Workers: A Discrete Choice Experiment By Poulissen, Davey; de Grip, Andries; Fouarge, Didier; Künn-Nelen, Annemarie
  4. Measuring long-run price elasticities in urban travel demand By Javier Donna
  5. Are Transboundary Nature Protected Areas International Public Goods and Why People Think They Are (Not)? Hybrid Modelling Evidence from the EU Outer Borders By Sviataslau Valasiuk; Mikołaj Czajkowski; Marek Giergiczny; Tomasz Żylicz; Knut Veisten; Iratxe Landa Mata; Askill Harkjerr Halse; Per Angelstam
  6. Identifying Choice Correspondences By Elias Bouacida
  7. Choice architecture and incentives increase COVID-19 vaccine intentions and test demand By Serra-Garcia, Marta; Szech, Nora
  8. Identification and Estimation of Non-stationary Hidden Markov Models By Martin Garcia-Vazquez

  1. By: Nguyen, Lien; Jokimäki, Hanna; Linnosmaa, Ismo; Saloniki, Eirini Christina; Batchelder, Laurie; Malley, Juliette; Lu, Hui; Burge, Peter; Trukeschitz, Birgit; Forder, Julien
    Abstract: Introduction: The Adult Social Care Outcomes Toolkit (ASCOT) was developed in England to measure people’s social care-related quality of life (SCRQoL). Objectives: The aim of this paper is to estimate preference weights for the Finnish ASCOT for service users (ASCOT-SU). In addition, we tested for learning and fatigue effects in the choice experiment used to elicit the preference weights. Methods: The analysis data (n = 1000 individuals) were obtained from an online survey sample of the Finnish adult general population using gender, age and region as quotas. The questionnaire included a best-worst scaling (BWS) experiment using ASCOT. Each respondent sequentially selected four alternatives (best, worst; second best, second worst) for eight BWS tasks (n = 32,000 choice observations). A scale multinomial logit model was used to estimate the preference parameters and to test for fatigue and learning. Results: The most and least preferred attribute-levels were “I have as much control over my daily life as I want” and “I have no control over my daily life”. The preference weights were not on a cardinal scale. The ordering effect was related to the best choices. Learning effect was in the last four tasks. Conclusions: This study has developed a set of preference weights for the ASCOT-SU instrument in Finland, which can be used for investigating outcomes of social care interventions on adult populations. The learning effect calls for the development of study designs that reduce possible bias relating to preference uncertainty at the beginning of sequential BWS tasks. It also supports the adaptation of a modelling strategy in which the sequence of tasks is explicitly modelled as a scale factor.
    Keywords: ASCOT; ASCOT for service users; preference; quality of life; social care-related quality of life (SCRQoL); best-worst scaling (BWS); learning and fatigue effects; scale multinomial logit (S-MNL); Finland; 462-14-160
    JEL: C35 C90 I18 I31 I39
    Date: 2021–06–02
  2. By: Tanga M. Mohr; Peter A. Groothuis; John C. Whitehead; Kristan Cockerill; William P. Anderson, Jr; Chuanhui Gu
    Abstract: A survey is consequential to a respondent if they believe their answer could influence the policy being addressed in the survey and if they will have to pay for the policy if implemented. We show that separating out respondents who find the survey inconsequential, even by very simple metrics such as a single question, goes a long way if the goal is to improve willingness to pay estimates. Using various follow up questions, we develop multiple thresholds to classify respondents into groups based on whether or not their responses satisfy the consequentiality criteria. Independent of the threshold, we find that respondents in the inconsequential group have a willingness to pay that is insignificantly different from zero. For those in the consequential group, marginal willingness to pay does not significantly depend on the threshold. These results lend additional support to the ‘knife-edge’ hypothesis. To provide additional insights we explore consequentiality using a hybrid choice model and find that the likelihood of payment consequentiality increases with income while respondents who find the survey policy consequential are more likely to be in favor of the policy. Key Words: consequentiality, stormwater management, stated preferences, hybrid choice models, generalized structural equation method
    Date: 2020
  3. By: Poulissen, Davey (Maastricht University); de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Künn-Nelen, Annemarie (ROA, Maastricht University)
    Abstract: Various studies have shown that temporary workers participate less in training than those on permanent contracts. Human resources practices are considered to be an important explanation for this difference. We develop a theoretical framework for employers' provision of training that explicitly incorporates the costs and benefits associated with training investments in employees with different types of employment contracts. Our framework not only predicts employers to be less willing to invest in temporary workers due to the shorter time horizon associated with such an investment, but it also provides insights into how this willingness depends on characteristics of the training that are related to the expected costs and benefits of the training investment. A discrete choice experiment is used to empirically test the predictions from our theoretical framework. In line with our theoretical framework, we find that employers are less likely to invest in the training of temporary workers. This particularly holds when temporary workers do not have the prospect of a permanent contract with their current employer. Furthermore, we show that employers' likelihood of investing in temporary workers indeed depends on aspects related to the costs and benefits of training, that is, a financial contribution to the training costs made by employees, a repayment agreement that applies when workers leave the organisation prematurely, and the transferability of the skills being trained. Our findings can be used to increase employers' willingness to invest in temporary workers. However, similar effects are observed when looking at employers' willingness to invest in permanent workers, suggesting that it will be difficult to decrease the gap in employers' willingness to invest between temporary and permanent workers.
    Keywords: flexible contracts, human capital investments, stated preference experiment, cost–benefit assessment
    JEL: J24 J41 J62
    Date: 2021–05
  4. By: Javier Donna (University of Florida)
    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 isused 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: 2021–05
  5. By: Sviataslau Valasiuk (Faculty of Economic Sciences, University of Warsaw; Swedish University of Agricultural Sciences, Faculty of Forest Sciences, School for Forest Management, Forest-Landscape-Society Network); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Marek Giergiczny (Faculty of Economic Sciences, University of Warsaw); Tomasz Żylicz (Faculty of Economic Sciences, University of Warsaw); Knut Veisten (Institute of Transport Economics, Gaustadalleen); Iratxe Landa Mata (Institute of Transport Economics, Gaustadalleen); Askill Harkjerr Halse (Institute of Transport Economics, Gaustadalleen); Per Angelstam (Department of Forestry and Wildlife Management, Inland Norway University of Applied Sciences)
    Abstract: Former studies have shown that transboundary nature protected areas are not perceived as pure international public goods by citizens in neighbouring countries that share national parks. In this study, we assess what drives the valuation of nature protection on the other side of the border in two European transboundary nature areas, the Białowieża Forest and Fulufjället. Applying hybrid choice modelling, we account for people’s attitudes when eliciting their preferences towards transboundary nature protected areas, and examine the impact of attitudes on the degree to which those preferences are consistent with the international public good hypothesis. We found that the intention of visiting the foreign part of the transboundary area, appreciation of transboundary justice and altruism, were the main drivers, whereas suspicious attitude towards the neighbouring country, propensity to free-ride, and manifestations of ‘patriotism’ applied as international public good mitigators to a limited degree only. Value of an extending the protection regime abroad was still positive for Scandinavians, whilst for Polish and Belarusian respondents a policy aiming at extending the protection abroad would lead to loss of human welfare. Facilitating visits of the foreign part by enhancing cross-border access can be expected to shift peoples’ preferences towards transboundary co-operation.
    Keywords: International public goods, national parks, forest, transboundary nature protected areas, public preferences, willingness to pay, discrete choice experiment, hybrid modeling
    JEL: Q51 Q57 H41
    Date: 2021
  6. By: Elias Bouacida
    Abstract: We introduce a general method for identifying the sets of best alternatives of decision makers in each choice sets, i.e., their choice correspondences, experimentally. In contrast, most experiments force the choice of a single alternative in each choice set. The method allow decision makers to choose several alternatives, provide a small incentive for each alternative chosen, and then randomly select one for payment. We derive two conditions under which the method may recover the choice correspondence. First, when the incentive to choose several alternative becomes small. Second, we can at least partially identifies the choice correspondence, by obtaining supersets and subsets for each choice set. We illustrate the method with an experiment, in which subjects choose between four paid tasks. In the latter case, we can retrieve the full choice correspondence for 18% of subjects and bind it for another 40%. Using the limit result, we show that 40% of all observed choices can be rationalized by complete, reflexive and transitive preferences in the experiment, i.e., satisfy the Weak Axiom of Revealed Preferences – WARP hereafter. Weakening the classical model, incomplete preferences or just-noticeable difference preferences do not rationalize more choice correspondences. Going beyond, however, we show that complete, reflexive and transitive preferences with menu-dependent choices rationalize 96% of observed choices. Having elicited choice correspondences allows to conclude that indifference is widespread in the experiment. These results pave the way for exploring various behavioral models with a unified method.
    Date: 2021
  7. By: Serra-Garcia, Marta; Szech, Nora
    Abstract: Willingness to vaccinate and test are critical in the COVID-19 pandemic. We study the effects of two measures to increase vaccination and testing: "choice architecture" and monetary compensations. Choice architecture has the goal of "nudging" people into a socially desired direction without affecting their choice options. Compensations reward vaccine takers and are already in use by some organizations. Yet there is the concern that compensations may decrease vaccination if compensations erode intrinsic motivation to vaccinate. We show that both approaches, compensations and choice architecture, significantly increase COVID-19 test and vaccine demand. Yet, for vaccines, low compensations can backfire.
    Keywords: choice architecture,incentives,COVID-19,vaccine hesitancy,test avoidance
    JEL: D01 D04 I12
    Date: 2021
  8. By: Martin Garcia-Vazquez (University of Minnesota)
    Abstract: This paper provides a novel constructive identification proof for non-stationary Hidden Markov models. The identification result establishes that only two periods of time are required if one wants to identify transition probabilities between those two periods. This is achieved by using three conditionally independent noisy measures of the hidden state. The paper also provides a novel estimator for nonstationary hidden Markov models based on the identification proof. Montecarlo experiments show that this estimator is faster to compute than maximum likelihood, and almost as precise for large enough samples. Moreover, I show how my identification proof and my estimator can be used in two different relevant applications: Identification and estimation of Conditional Choice Probabilities, initial conditions and laws of motion in dynamic discrete choice models when there is an unobservable state; and identification and estimation of the production function of cognitive skills in a child development context when skills and investment are unobserved.
    Keywords: identification, Child Development, cognitive skills, investment in children
    JEL: C10 J24
    Date: 2021–05

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