nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2022‒09‒12
twelve papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Influence of consumer ethnocentrism on willingness to pay for domestic and imported prickly pear jam By Lagoudakis, Angelos
  2. Avoiding unanticipated power outages: households’ willingness to pay in India By Bigerna, Simona; Choudhary, Piyush; Kumar Jain, Nikunj; Micheli, Silvia; Polinori, Paolo
  3. The Limit of the Marginal Distribution Model in Consumer Choice By Yanqiu Ruan; Xiaobo Li; Karthyek Murthy; Karthik Natarajan
  4. Consumer Scores and Price Discrimination By Alessandro Bonatti; Gonzalo Cisternas
  5. The Consumer Market for Meat Alternatives By Neuhofer, Zachary T.; Lusk, Jayson L.
  6. National Impacts of E-commerce Growth: Development of a Spatial Demand Based Tool By Jaller, Miguel; Xiao, Runhua; Dennis, Sarah; Rivera-Royero, Daniel; Pahwa, Anmol
  7. How to Increase Housing A ordability? Understanding Local Deterrents to Building Multifamily Housing By Kulka. Amrita; Sood, Aradhya; Chiumenti, Nicholas
  8. Land or Labor? Weather Shocks and Choice Between Labor-Saving and Land-Augmenting Technology By Nouve, Yawotse
  9. For Better or Worse? Subjective Expectations and Cost-Benefit Trade-Offs in Health Behavior: An Application to Lockdown Compliance in the United Kingdom By Conti, G.;; Giustinelli, P.;
  10. Ordered Surprises and Conditional Probability Systems By Adam Dominiak; Matthew Kovach; Gerelt Tserenjigmid
  11. Demand for Rail Transportation of Grain to the Southeastern U.S. By Jo, Jungkeon; Secor, William
  12. Social norms and individual climate protection activities: A framed field experiment for Germany By Daniel Engler; Gunnar Gutsche; Amantia Simixhiu; Andreas Ziegler

  1. By: Lagoudakis, Angelos
    Keywords: Research Methods/Statistical Methods, Institutional and Behavioral Economics, Marketing
    Date: 2022–08
  2. By: Bigerna, Simona; Choudhary, Piyush; Kumar Jain, Nikunj; Micheli, Silvia; Polinori, Paolo
    Abstract: Reliable electricity is a key factor in improving the living conditions of households and sustainable development of the country. Power outages restrict economic and social welfare of developing countries. This study used contingent valuation survey to elicit the factors affecting Indian household’s willingness to pay to avoid unanticipated power outages. The survey was outlined to ensure that a household gives preferences considering multiple aspects of the outages. The households were asked to state their willingness to pay for five different types of outages. Empirical data from 1043 Indian households were analyzed using double hurdle approach. The econometric results indicate that the households’ willingness to pay to avoid power outage strictly depend on the length of outages ranging, on average, from 30.2 INR (2 hours) to INR. 245.6 (12 hours). Further income and environmental attitude of respondents positively influence higher WTP to avoid power outages. Our findings provide useful insights for policy makers and utility companies to design more reliable and customer centric energy generation and distribution models.
    Keywords: Power outages; contingent valuation; willingness to pay; residential electricity
    JEL: C24 C93 D12 Q41
    Date: 2022–08–11
  3. By: Yanqiu Ruan; Xiaobo Li; Karthyek Murthy; Karthik Natarajan
    Abstract: Given data on choices made by consumers for different assortments, a key challenge is to develop parsimonious models that describe and predict consumer choice behavior. One such choice model is the marginal distribution model which requires only the specification of the marginal distributions of the random utilities of the alternatives to explain choice data. In this paper, we develop an exact characterisation of the set of choice probabilities which are representable by the marginal distribution model consistently across any collection of assortments. Allowing for the possibility of alternatives to be grouped based on the marginal distribution of their utilities, we show (a) verifying consistency of choice probability data with this model is possible in polynomial time and (b) finding the closest fit reduces to solving a mixed integer convex program. Our results show that the marginal distribution model provides much better representational power as compared to multinomial logit and much better computational performance as compared to the random utility model.
    Date: 2022–08
  4. By: Alessandro Bonatti; Gonzalo Cisternas
    Abstract: The consumer suffers because she buys less (with the loss represented by the red area). And while not depicted, she also suffers from future price discrimination due to information about her willingness to pay (that is, the intercept of her demand function) getting transmitted to Firm 2. However, Firm 1 is forced to lower its price (P’ in the figure) after the strategic demand reduction occurs. If the consumer has high willingness to pay, the benefit of this discount applied to many units is such that she wants to be tracked (the blue area—a benefit—grows as the intercept of demand increases).
    Keywords: price discrimination; consumer scores; privacy
    JEL: E51
    Date: 2022–07–11
  5. By: Neuhofer, Zachary T.; Lusk, Jayson L.
    Keywords: Marketing, Agribusiness, Institutional and Behavioral Economics
    Date: 2022–08
  6. By: Jaller, Miguel; Xiao, Runhua; Dennis, Sarah; Rivera-Royero, Daniel; Pahwa, Anmol
    Abstract: This project aims to study the impacts of e-commerce on shopping behaviors and related externalities. The objectives are divided into five major tasks in this project. Methods used include Weighted Multinomial Logit (WMNL) models, time series forecasting, and Monte Carlo (MC) simulations. The American Time Use Survey (ATUS) and the National Household Travel Survey (NHTS) databases are used for identifying the independent and dependent variables for behavioral modeling. At the same time, the researchers collected all MSA population data from the U.S. Census Bureau and combined the shares of each variable from ATUS to generate a synthesized population, which serves as input into the MC simulation framework together with the behavioral model. This simulation framework includes the generation of shopping travel parameters and the calculation of negative externalities. The authors do this to estimate e-commerce demand and impacts every decade until 2050. The results and analyses provide information that supports the generation of shopping travel and the estimations of a series of negative externalities using MC simulation, which includes shopping travel parameters, last-mile delivery parameters, and emission rate per person. For different parameters, a unique probability distribution or a regression relation is obtained for different MSAs, and this distribution is fed into the subsequent MC simulation. Finally, the researchers simulated shopping behaviors for synthesized populations (until 2050) and to estimate the expected negative externalities. The MC simulation generates aggregate average vehicle miles traveled (VMT) and emissions (negative externalities) for different shopping activities in the planning years and different MSAs. View the NCST Project Webpage
    Keywords: Engineering, Social and Behavioral Sciences, E-commerce, shopping behavior, externalities, forecast, Monte Carlo simulation
    Date: 2022–08–01
  7. By: Kulka. Amrita (University of Warwick); Sood, Aradhya (University of Toronto); Chiumenti, Nicholas (FRB Boston)
    Abstract: This paper studies how various land-use regulations interact to affect housing supply and affordability. We use cross-sectional variation across space from a novel parcel-level zoning data and a boundary discontinuity design at regulation boundaries to obtain causal estimates for the effect of various zoning regulations on the supply of different types of housing, single-family house prices, multifamily rents, and households’ willingness-to-pay for higher density. We find that relaxing density restrictions (minimum lot size and maximum dwelling units), either alone or jointly with relaxing other regulations, is most effective at increasing supply, particularly of multifamily properties, and reducing rents and house prices. Conversely, enabling multifamily zoning or relaxing height regulations alone has little impact. Our results suggest that the small-scale reforms in zoning regulations proposed around the country can increase housing affordability. However, a fall in multifamily rents is often accompanied by a reduction in single-family house prices, complicating the political economy of land-use reform.
    Keywords: multifamily zoning ; height restrictions ; density ; house prices ; rents JEL Codes: R21 ; R31 ; R58 ; H77 ; H11 ; K25
    Date: 2022
  8. By: Nouve, Yawotse
    Keywords: International Development, Agricultural and Food Policy, Risk and Uncertainty
    Date: 2022–08
  9. By: Conti, G.;; Giustinelli, P.;
    Abstract: Health behaviors are actions individuals take that affect their health. Most health behaviors can have both positive and negative consequences for the individual, generating trade-offs in choice. During the acute phases of the COVID-19 pandemic, social distancing and the more extreme self-isolation and shielding were the main actions through which people could (were required to) protect themselves and others from infection and its health-harming consequences. Distancing and isolation, however, are not without costs or risks for individuals’ wellbeing. Because the costs and benefits of alternative actions are ex ante uncertain, individual choices depend on decision makers’ expectations over choice consequences and on how they resolve the trade-offs between expected costs and benefits. Using rich data on subjective expectations collected during the first UK lockdown, we first document people’s perceived costs (risks) and benefits (returns) of alternative compliance behaviors along with their compliance plans. We then develop and estimate a simple model of compliance behavior with uncertain costs and benefits, which we use to quantify the utility trade-offs underlying compliance, decompose group differences in compliance into components attributable to variation in expectations vis-`a-vis preferences, and compute the compensation required for people to be isolated. In a short follow-up, we implement a randomized sensitization intervention reviewing the timeline of the “Cummings affair†. Labour supporters react to the treatment’s negative prompt by lowering their subjective probability of never leaving home (the government’s recommendation) and increasing that of discretionary compliance.
    JEL: C25 C83 D84 I12
    Date: 2022–07
  10. By: Adam Dominiak; Matthew Kovach; Gerelt Tserenjigmid
    Abstract: We study conditioning on null events, or surprises, and behaviorally characterize the Ordered Surprises (OS) representation of beliefs. For feasible events, our Decision Maker (DM) is Bayesian. For null events, our DM considers new beliefs in order until one is consistent with the surprise. The DM adopts this prior and updates via Bayes' rule. Unlike Bayesian updating, OS provides a complete updating rule: conditional beliefs are well-defined for any event. OS is (behaviorally) equivalent to the Conditional Probability System (Myerson 1986b) and is a strict, special case of Hypothesis Testing (Ortoleva, 2012), clarifying the relationships between the various approaches to null events.
    Date: 2022–08
  11. By: Jo, Jungkeon; Secor, William
    Keywords: Marketing, Agribusiness, Agricultural Finance
    Date: 2022–08
  12. By: Daniel Engler (University of Kassel); Gunnar Gutsche (University of Kassel); Amantia Simixhiu (University of Kassel); Andreas Ziegler (University of Kassel)
    Abstract: Based on the well-known observation that social norms can guide individual behavior, this paper empirically examines the causal effect of related information interventions on revealed climate protection activities, measured through incentivized donations. In our field-experimental setting, we differentiate between descriptive social norms by providing information about individual climate protection activities in Germany, injunctive social norms by providing information about what people in Germany think about the need for climate protection activities, and a combination of both social norms. Based on representative survey data for more than 1,600 individuals in Germany, our econometric analysis shows some weak evidence that information about both descriptive and injunctive social norms increases donations for climate protection. The decomposition of this estimated average treatment effects reveals that the corresponding treatment particularly has a significantly positive effect at the extensive margin, i.e. on the probability to donate for climate protection. These results suggest that a combined information intervention referring to both descriptive and injunctive social norms is at least able to stimulate the general willingness for climate protection. In addition, our analysis of heterogeneous treatment effects reveals that strong social preferences (in terms of altruism and trust) and high environmental attitudes (in terms of environmental awareness and ecological policy identification) induce significantly positive information treatment effects on donations for climate protection. This result suggests that individuals in Germany with a strong environmental and social orientation do not only behave directly more climate-friendly, but can also be better stimulated by information about descriptive and/or injunctive social norms.
    Keywords: Climate protection activities, descriptive and injunctive social norms, information interventions, heterogeneous treatment effects, framed field experiment
    JEL: Q54 D64 D83 D91 C93
    Date: 2022

This nep-dcm issue is ©2022 by Edoardo Marcucci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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