nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2022‒02‒28
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Farmers’ willingness to pay for digital and conventional credit: Evidence from a discrete choice experiment in Madagascar By Sarfo, Yaw; Musshoff, Oliver; Weber, Ron; Danne, Michael
  2. Speaking from experience: preferences for cooking with biogas in rural India By Talevi, Marta; Pattanayak, Subhrendu K.; Das, Ipsita; Lewis, Jessica J.; Singha, Ashok K.
  3. Is There a Diminishing Value of Urban Amenities as a Result of the COVID-19 Pandemic? By van Vuuren, Aico
  4. von Mises-Fisher distributions and their statistical divergence By Toru Kitagawa; Jeff Rowley
  5. Do Jobseekers Value Diversity Information? Evidence from a Field Experiment By Choi, Jung Ho; Pacelli, Joseph; Rennekamp, Kristina M.; Tomar, Sorabh

  1. By: Sarfo, Yaw; Musshoff, Oliver; Weber, Ron; Danne, Michael
    Abstract: In recent decades, microfinance institutions (MFIs) with financial products designed for low income groups have been established all over the world. However, credit access for farmers in developing countries remains low. Digital financial services are rapidly expanding globally at the moment. They also bear great potential to address farmers in remote rural areas. Beyond mobile money services, digital credit is successively offered and also discussed in literature. Compared to conventional credit which is granted based on a thorough assessment of the loan applicant’s financial situation, digital credit is granted based on an automated analysis of the existing data of the loan applicant. However, empirical research on farmers’ preferences and willingness to pay (WTP) for digital credit is non-existent. We employ a discrete choice experiment (DCE) to compare farmers’ WTP for digital and conventional credit. Our results indicate a higher WTP for digital credit compared to conventional credit. Furthermore, we find that longer loan duration has a higher effect on farmers’ WTP for digital credit compared to conventional credit. Additionally, our results show that instalment repayment condition reduces farmers’ WTP for digital credit whilst increasing their WTP for conventional credit. Our results show the potential of digital credit for agricultural finance in rural areas of Madagascar if a certain level of innovation is applied in designing digital credit products.
    Keywords: Farm Management
    Date: 2021–11–18
  2. By: Talevi, Marta; Pattanayak, Subhrendu K.; Das, Ipsita; Lewis, Jessica J.; Singha, Ashok K.
    Abstract: Biogas has the potential to satisfy the clean energy needs of millions of households in under-served and energy-poor rural areas, while reducing both private and social costs linked to (i) fuels for household cooking, (ii) fertilizers, (iii) pressure on forests, and (iv) emissions (e.g., PM 2.5 and methane) that damage both household health and global climate. While the literature has focused on identifying these costs, less attention has been paid to household preferences for biogas systems — specifically what attributes are popular with which types of households. We conduct a discrete choice experiment with 503 households in rural Odisha, India, to better characterize preferences for different attributes (smoke reduction, fuel efficiency, and maintenance) and for different cooking technologies (biogas and an improved biomass cookstove). We find that on average households value smoke reduction and fuel efficiency. Willingness to pay (WTP) a premium for the improved biomass cookstove is low, while willingness to pay a premium for biogas is high. Nonetheless, WTP varies by the type of previous experience with biogas (e.g., good or bad experience) and with time and risk preferences of households. While risk-averse and impatient respondents have lower WTP for the improved cookstoves, previous experience with biogas attenuates this gap. These findings suggest that biogas uptake and diffusion could be improved by complementing existing subsidies with technology trials, good quality products, maintenance, and customer services to reduce uncertainty.
    Keywords: energy poverty; Biogas; improved cookstoves; air pollution; firewood; discrete choice experiment; Odisha; ES/J500070/1; UKRI block grant
    JEL: I30 Q20 Q40
    Date: 2022–03–01
  3. By: van Vuuren, Aico (University of Gothenburg)
    Abstract: We investigate whether the COVID-19 pandemic decreased the willingness to pay for urban amenities such as restaurants, cinemas and theaters. We do this by using a hedonic pricing model in combination with a time-gradient difference-in-difference approach. We use a data set that contains virtually all apartments for sale in the larger Stockholm area. We use a very detailed and flexible definition of density of urban amenities based on the exact location of these amenities and the walking distance from the apartments to these amenities. We find a decrease of 1.9 percent of apartments that we label as amenity rich.
    Keywords: COVID-19, urban economics, amenities
    JEL: R00 R23 R30
    Date: 2022–01
  4. By: Toru Kitagawa; Jeff Rowley
    Abstract: The von Mises-Fisher family is a parametric family of distributions on the surface of the unit ball, summarised by a concentration parameter and a mean direction. As a quasi-Bayesian prior, the von Mises-Fisher distribution is a convenient and parsimonious choice when parameter spaces are isomorphic to the hypersphere (e.g., maximum score estimation in semi-parametric discrete choice, estimation of single-index treatment assignment rules via empirical welfare maximisation, under-identifying linear simultaneous equation models). Despite a long history of application, measures of statistical divergence have not been analytically characterised for von Mises-Fisher distributions. This paper provides analytical expressions for the $f$-divergence of a von Mises-Fisher distribution from another, distinct, von Mises-Fisher distribution in $\mathbb{R}^p$ and the uniform distribution over the hypersphere. This paper also collect several other results pertaining to the von Mises-Fisher family of distributions, and characterises the limiting behaviour of the measures of divergence that we consider.
    Date: 2022–02
  5. By: Choi, Jung Ho (Stanford Graduate School of Business); Pacelli, Joseph (Harvard Business School); Rennekamp, Kristina M. (Cornell University); Tomar, Sorabh (Southern Methodist University)
    Abstract: We examine how information about the diversity of a potential employe r’s workforce affects individuals’ job-seeking behavior, and whether workers’ preferences explain corporate disclosure decisions. We embed a field experiment in job recommendation emails sent from a leading career advice agency in the US. The experimental treatment involves highlighting a diversity metric to jobseekers. Studying 267,494 unique jobseekers, we find that disclosing diversity scores in job postings increases the click-through rate of jobseekers for firms with higher diversity scores. These effects are more pronounced for fe male and entry-level jobseekers. We estimate that jobseekers update their willingness to pay (WTP) for a fi rm’s diversity by $1,463 when faced with a 10% increase in diversity scores relative to the interquartile range. We conduct a follow-up survey with jobseekers to better understand why diversity information was useful to them. Finally, we document that firms in industries characterized by higher jobseeker responsiveness to diversity information tend to voluntarily disclosure diversity metrics in their 10-Ks under new SEC disclosure requirements. That is , disclosure choices partially reflect ‘jobseeker materiality.’ Overall, our findings generate important insights regarding jobseekers’ demand for diversity information.
    JEL: C93 D40 D83 J64 M14 M41
    Date: 2022–02

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