nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2022‒08‒08
fifteen papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Combining Revealed and Stated Preference Models for Artificial Reef Siting: A Study in the Florida Keys By Paul Hindsley; O. Ashton Morgan; John C. Whitehead
  2. Stated Farmers’ Preferences and Willingness to Pay for Climate Resilient Potato Varieties in Kenya: A Discrete Choice Experiment By Kimathi, Sally Mukami; Ayuya, Oscar Ingasia; Mutai, Benjamin
  3. Does ‘Price Framing’ Influence Empirical Estimates in Discrete Choice Experiments? A Case Study for the South African Wine Industry By Chikumbi, Lydia; Scasny, Milan
  4. Customisable or local? Consumers’ preferences and willingness for the characteristics of fruit and vegetable box schemes in Scotland By Akaichi, Faical; Toma, Luiza
  5. The importance of perspective when eliciting preferences for health – A study of the willingness to pay for hepatitis C treatment By Olofsson, Sara; Hjalte, Frida; Persson, Ulf; Lindgren, Peter
  6. Valuations of Transport Nuisances and Cognitive Biases: A Survey Laboratory Experiment in the Pyrenees Region By Laurent Denant-Boèmont; Javier Faulin; Sabrina Hammiche; Adrian Serrano-Hernandez
  7. Alternative adaptation scenarios towards pesticide-free urban green spaces: Welfare implication for French citizens By Marianne Lefebvre; Masha Maslianskaia-Pautrel; Pauline Laille
  8. Animal Welfare, Altruism and Policy Support By Läpple, Doris; Osawe, Osayanmon Wellington
  9. Free goods and economic welfare By Diane Coyle; David Nguyen
  10. Untapping Beer Terroir: Experimental Evidence of Regional Variation in Hop Flavor Profiles By Malone, Trey; Staples, Aaron J.; Sirrine, J. Robert; Mull, Alec; Stuhr, Scott; Adams, Alex
  11. Revealed Deliberate Preference Change By Niels Boissonnet; Alexis Ghersengorin; Simon Gleyze
  12. A mixture of ordered probit models with endogenous switching between two latent classes By Jochem Huismans; Andrei Sirchenko; Jan Willem Nijenhuis
  13. The Impact of Ridehailing on Other Travel Modes and on Vehicle Dependency By Iogansen, Xiatian; Circella, Giovanni
  14. Nonparametric Analysis of the Mixed-Demand Model By Hjertstrand, Per
  15. From fork to fish: The role of consumer preferences on the sustainability of fisheries By Coralie KERSULEC; Luc DOYEN

  1. By: Paul Hindsley; O. Ashton Morgan; John C. Whitehead
    Abstract: This paper investigates recreational divers’ preferences for artificial reef diving and willingness to pay (WTP) for large ship, artificial reef site attributes in the Florida Keys. We investigate diver demand for existing decommissioned ships that have been sunk off the Florida Keys as well as demand for four new vessels that are available for disposal from the U.S. Department of Transportation Maritime Administration inventory. Using survey data from divers, we compare revealed preference (RP) site choices, stated preference (SP) choices from a discrete choice experiment, and joint RP/SP choices. Our analysis also incorporates stated attribute nonattendance (ANA) at the choice-task level. Our results indicate that the joint RP/SP models with stated ANA are preferred, leading to decreases in marginal WTP as well as decreases in the variability of marginal WTP estimates in the 95% confidence intervals. Results provide a framework for directing more efficient future decision making regarding sinkings at locations that will enhance welfare for divers. Key Words: discrete choice experiment; artificial reefs; diving demand; willingness to pay
    Date: 2022
  2. By: Kimathi, Sally Mukami; Ayuya, Oscar Ingasia; Mutai, Benjamin
    Abstract: Despite sustained efforts by various research organizations in developing and disseminating climate resilient varieties, adoption of climate resilient potato varieties (CRPVs) remains low in Sub-Saharan Africa. This has been majorly attributed to limited coordination between formal research institutions and farmers hence sidelining farmers’ preferences especially smallholder farmers. Considering farmer preferences in the breeding process may yield optimal combination of varietal attributes hence increasing adoption. Therefore, this study used a discrete choice experiment to investigate farmers’ preferences and mean Willingness to Pay (WTP) for various attributes of CRPV. Results indicate that farmers have a strong preference for high resistance to pests and diseases as compared to other attributes which include low water requirements, short maturation period and high yield. Despite farmers preferring low prices for CRPV attributes, we also note that they were low price responsive. A small change in price did not affect their preferences for other CRPV attributes. This study emphasizes on the need for participatory breeding efforts that embed traits preferred by farmers hence satisfying the demands of different population segments based on age, gender and education level.
    Keywords: Crop Production/Industries, Farm Management
    Date: 2022–04
  3. By: Chikumbi, Lydia; Scasny, Milan
    Abstract: The approach and survey used to examine non-market value in a stated preference study can influence the outcomes and impact the validity and reliability of value estimates. While prior research has investigated the impact of 'price framing' on decision-making in other disciplines, (i.e. marketing & psychology), little is known about its validity and reliability in Discrete Choice Experiments (DCEs) and environmental valuation. The study explores the effect of 'price framing' on DCE measurements. The tests are carried out using data from a choice experiment on preferences for natural preservatives in wine. The same respondents completed a nearly identical DCE survey, one with a real price and another with a percentage price change as cost attribute. 611 respondents completed the survey, and a panel mixed logit model was used for the analysis. Results demonstrate that 'price framing' remarkably influenced respondents WTP changes in attributes. The data reveals that while the rank order of importance of attributes, signs, and significance levels are similar for the two samples, they differ in the parameter magnitudes. The study sheds light on the establishment of guidelines for developing valid cost attributes in DCEs studies.
    Keywords: Demand and Price Analysis, Agribusiness
    Date: 2022
  4. By: Akaichi, Faical; Toma, Luiza
    Abstract: The demand for fruit and vegetable boxes (FVB) has increased sharply (111%) as a result of the Covid19 pandemic. Nonetheless, there is a growing fear that FVB schemes may increase food waste at home as, for example, many of the available fruit and veg boxes are not fully customisable. A choice experiment-based survey with 500 Scottish consumers was conducted to estimate consumers’ preferences and willingness to pay for strategies (e.g., completely customisable fruit and veg boxes) that can help reduce food waste that may result from the purchase and use of FVB. The preliminary results showed that customisability is a major barrier that is deterring over 76% of consumers from buying FVB. The sample consumers were found to be willing to pay a substantial price premium to improve the customisability of the FVB. Other FVB’s attributes that are frequently promoted by the sellers of FVB were found to be significantly less valued by 37% of the sampled Scottish consumers.
    Keywords: Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Consumer/Household Economics
    Date: 2022–04
  5. By: Olofsson, Sara (IHE - The Swedish Institute for Health Economics); Hjalte, Frida (IHE - The Swedish Institute for Health Economics); Persson, Ulf (IHE - The Swedish Institute for Health Economics); Lindgren, Peter (IHE - The Swedish Institute for Health Economics)
    Abstract: This report present the result of a study of the willingness to pay (WTP) for hepatitis C treatment from different perspectives, including who you pay for (yourself, others, yourself and others) and when you pay (when at risk, when assuming having hepatitis C). The study shows that the WTP varies significantly depending on the perspective used and shows the importance of considering the perspective used when designing and interpreting preference studies. <p> Background: <p> The second generation antiviral therapy for individuals with hepatitis C (HCV) has been found to be a cost-effective treatment, but would result in a high budget impact. The Swedish national government made an agreement with the regions to help funding the new treatment, implying a societal perspective where it is relevant to search for the consumer value of treatment. The aim of this study is to estimate the value of HCV treatment by performing a willingness to pay (WTP) study from different perspectives. <p> Methods: <p> The study is performed as a web-based survey of a sample from the Swedish general population (n=513), using the contingent valuation (CV) approach. A framework of perspectives was applied with respect to whom to pay for; her-or himself only (personal perspective), others only (social perspective), both her- or himself and others. <p> Results: <p> The personal perspective resulted in the highest WTP estimates while the lowest WTP estimates was found for the social perspective. The WTP per HCV treatment varied between SEK 0.2 million and SEK 38 million. The WTP estimates were similar between the ex post perspective and ex ante perspective. Respondents believing that others would pay less than themselves had a higher WTP in all scenarios except the scenario with the social perspective. <p> Conclusion: <p> This study shows that the value appears to be higher and more valid when individuals are asked to pay for themselves. This value may be driven by a will to secure access to the treatment when others are willing to pay less.
    Keywords: willingness to pay; WTP; hepatitis c; perspective; risk; hälsoekonomi; health economics
    Date: 2022
  6. By: Laurent Denant-Boèmont (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Javier Faulin (UPNA - Universidad Pública de Navarra [Espagne] = Public University of Navarra); Sabrina Hammiche (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Adrian Serrano-Hernandez (UPNA - Universidad Pública de Navarra [Espagne] = Public University of Navarra)
    Abstract: We designed a survey that aims at estimating individual willingness-to-pay to reduce noise and air pollution arising from transportation activity near the Pyrenees in Navarre (Spain). Our participants cope with a series of contingent valuation questions and also with an economic experiment with real incentives about the same topic. Our goal is to identify several methodological problems in the valuation process coming from hypothetical bias, correlation effect and sequence effect when series of responses are requested. Our main results are that hypothetical bias is significant, because the willingness-to-pay is greater when the survey is hypothetical compared to when there is real monetary incentive. Likewise, the correlation effect also observes the same behavior since the willingness-to-pay for pollution mitigation is close to the one established for noise reduction. Finally, we have obtained mixed evidence for the sequence effect, being present only in the contingent valuation survey part.
    Keywords: Willingness-to-pay,Transport externality,Pollution,Cognitive bias,Laboratory economic experiment,Transportation
    Date: 2022–02
  7. By: Marianne Lefebvre (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Masha Maslianskaia-Pautrel (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Pauline Laille (Plante & Cité)
    Abstract: Adaptation of urban green spaces (UGSs) to allow their maintenance without pesticides is likely to impact the value attached to these green infrastructures by urban citizens. To understand citizens' preferences for UGSs in this context, a Discrete Choice Experiment was administered in France in 2017, when a pesticide ban in all UGSs was implemented. It allows evaluating the impact on citizens' welfare of different UGSs management scenarios without pesticides. The scenario offering new recreational opportunities is by far the most valued by citizens. Only a minority is worse-off in the "laisser-faire" scenario, where the vegetation is much less controlled. Citizens suffer from welfare losses in the scenario "apparently as before" since it comes at the cost of deteriorated working conditions for maintenance teams. The policy recommendations drawn can contribute to greater social acceptance of the transition towards pesticide-free UGSs.
    Keywords: JEL classification : Q24,Choice experiment,France,Pesticides,Urban green spaces,Welfare measure
    Date: 2022–06
  8. By: Läpple, Doris; Osawe, Osayanmon Wellington
    Abstract: Animal welfare provision by dairy farmers has implications that go well beyond the individual dairy farm. In this study, we assess dairy farmers' willingness to pay to support a policy aimed at improving calf welfare and link this to altruism. We conceptualise the farmer's decision into private reasons, and motivations to improve animal welfare on their own farm or eliminate bad practices elsewhere. Our data comes from a survey with over 400 Irish dairy farmers that included an experimental component. Specifically, we used a contingent valuation referendum method to elicit farmers' willingness to pay. We measured altruism with a financially incentivised social value orientation scale. Our findings indicate that most farmers are supportive of a policy scheme to improve animal welfare, and altruism is positively associated with higher willingness to pay. Specifically, our findings suggest that altruists are willing to pay €429 per annum, while individualistically minded farmers are willing to pay €220 per annum to support the new initiative. Our findings have important policy implications as we show that the majority of farmers are willing to financially support the implementation of a policy that can help to prevent public bads.
    Keywords: Livestock Production/Industries, Agricultural and Food Policy
    Date: 2022–04
  9. By: Diane Coyle; David Nguyen
    Abstract: This paper uses surveys representative of the UK online population to assess the welfare value of online and offline goods with a zero price. Through pilot studies and two surveys conducted before and during the Covid19 lockdown, we ascertain consumers' willingness to accept the loss of a range of 'free' online and offline goods, as well as some substitutes with a positive market price. The average value assigned to free goods was generally high, particularly when benchmarked against revenue figures for the services. The ratio of stated valuations to average revenues is higher for free than for non-zero price goods. We also present demand curves and explore the distributional effect of free goods as between different demographic groups. The surveys suggest that absolute valuations are not tightly anchored, but indicate clear rankings among goods. The natural experiment of the Covid19 lockdown brought about changes in valuations that were significant for some goods and have plausible sign and scale. We also discuss the limitations of the contingent valuation approach to estimate the aggregate effect of such goods on economic welfare, in particular questions of distribution, the meaning of the gap between willingness to accept and willingness to pay, and the absence of an adding up constraint for aggregate measurement.
    Keywords: contingent valuation, digital economic, welfare, free goods
    JEL: C43 D12 D60 I31
    Date: 2020–12
  10. By: Malone, Trey; Staples, Aaron J.; Sirrine, J. Robert; Mull, Alec; Stuhr, Scott; Adams, Alex
    Abstract: Thanks in part to the push for localized supply chains, U.S. hop production is becoming more regionally diverse. Differentiation in geographies implies changes in growing climates and other environmental factors known to alter the flavor profiles of agricultural commodities used in food and drink. We use a chemical analysis, blind taste test, and choice experiment to identify whether the same hop cultivar grown in different regions induces a unique sensory profile in hops and beer. The chemical analysis and taste test provide evidence of hop terroir, while we find that brewers are willing to pay a premium for local hops.
    Keywords: Crop Production/Industries, Agribusiness
    Date: 2021
  11. By: Niels Boissonnet (Universität Bielefeld = Bielefeld University); Alexis Ghersengorin (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Simon Gleyze (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We propose a model of rational preference change that is identifiable, empirically testable and founded on two normative principles. First, the decision maker (DM) must be able to justify her preference change by making attributes of the alternatives relevant or irrelevant. For instance, an employer who stops discriminating against candidates based on race or gender must make the attribute "race" or "gender" irrelevant for all her future choices. Second, DM must be consistent in her preference change. For instance, in the future the employer cannot make relevant again the attribute "race" or "gender", unless she makes (ir)relevant other complementary attributes. We show that two axioms on choice data which reflect these principles are necessary and sufficient to represent preference change by the maximization of a meta-preference. Finally, we apply our model to derive new insights on the polarization of political preferences.
    Date: 2022–05–19
  12. By: Jochem Huismans (Universiteit van Amsterdam); Andrei Sirchenko (Universiteit Maastricht); Jan Willem Nijenhuis (Universiteit Twente)
    Abstract: Ordinal responses can be generated, in a time-series context, by different latent regimes or, in a cross-sectional context, by different unobserved classes of population. We introduce a new command, swopit, that fits a mixture of ordered probit models with either exogenous or endogenous switching between two latent classes (or regimes). Switching is endogenous if the unobservables in the class-assignment model are correlated with the unobservables in the outcome models. We provide a battery of postestimation commands, assess by Monte Carlo experiments the finite-sample performance of the maximum likelihood estimator of the parameters, probabilities and their standard errors (both the asymptotic and bootstrap ones), and apply the new command to model the policy interest rates.
    Date: 2022–06–10
  13. By: Iogansen, Xiatian; Circella, Giovanni
    Abstract: Emerging transportation services such as ridehailing, whose development and adoption have been enabled by information and communication technology, are transforming people’s travel and activity patterns. It is unclear what these changes mean for environmental sustainability, as researchers are still trying to understand how new mobility services might impact multimodal travel and reliance on private cars. A better understanding of emerging mobility patterns can improve travel demand forecasting tools, inform investment decisions, and help provide efficient, reliable, and accessible transportation solutions. Building on a multi-year study, researchers at the University of California, Davis surveyed 4,071 California residents in 2018 about their personal attitudes and preferences, lifestyles, travel patterns, vehicle ownership, adoption and use of new mobility services, and personal and household characteristics. This brief summarizes the results of multiple studies that have used this dataset to generate insights into the impact of ridehailing services on the use of other travel modes and on car ownership prior to the COVID-19 pandemic, as well as provides policy implications. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Age groups, Automobile ownership, Consumer preferences, Mode choice, Shared mobility, Travel behavior
    Date: 2022–07–01
  14. By: Hjertstrand, Per (Research Institute of Industrial Economics (IFN))
    Abstract: The mixed-demand model allows for very flexible specification of what should be considered endogenous and exogenous in demand system estimation. This paper introduces a revealed preference framework to analyze the mixed-demand model. The proposed methods can be used to test whether observed data (with measurement errors) are consistent with the mixed-demand model and calculate goodness-of-fit measures. The framework is purely non-parametric in the sense that it does not require any functional form assumptions on the direct or indirect utility functions. The framework is applied to demand data for food and provides the first nonparametric empirical analysis of the mixed-demand model.
    Keywords: Demand systems; Measurement errors; Mixed-demand; Non-parametric; Revealed preference
    JEL: D11 D12
    Date: 2022–05–11
  15. By: Coralie KERSULEC; Luc DOYEN
    Abstract: The increasing consumption of seafood products raises concerns over the sustainability of marine ecosystems. We examine the role of consumer preferences on seafood demand and consequently on the sustainability of fisheries. Our analysis relies on a bio-economic model combining a demand derived from a CES utility depending on different fish species, a mixed fishery supply based on the Schaefer production function, a market equilibrium and a multispecies resource-based dynamics. Using both a steady-state approach and bio-economic viability goals, we identify analytical conditions on consumer preferences making it possible to balance biodiversity conservation with viable profits. We derive policy recommendations in terms of eco-labels for the sustainability of fisheries and the underlying seafood system. We exemplify the analytical results with the coastal fishery in French Guiana.
    Keywords: Biodiversity, Multi-species fishery, Sustainability, Ecolabel, CES utility function, Consumer preferences, Food systems, Viability goals; Bioeconomics.
    JEL: Q21 Q22 Q57
    Date: 2022

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