nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2023‒04‒03
fourteen papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. The Relevance of Life-Cycle CO2 Emissions for Vehicle Purchase Decisions: A Stated Choice Experiment for Germany By Michaela V. Gerhardt; Elke D. Kanberger; Andreas Ziegler
  2. Identifying the Distribution of Welfare from Discrete Choice By Bart Cap\'eau; Liebrecht De Sadeleer; Sebastiaan Maes
  3. Willingness to Pay for Carbon Mitigation: Field Evidence from the Market for Carbon Offsets By Rodemeier, Matthias
  4. Random Utility, Repeated Choice, and Consumption Dependence By Christopher Turansick
  5. The Willingness to Pay for Cider Products: Results of a Survey on Habits and Consumption Behavior By Eric Le Fur; Jean-Francois Outreville
  6. Identification of Ex Ante Returns Using Elicited Choice Probabilities By Romuald Meango
  7. Consumer preferences for new fermented food products that mix animal and plant protein sources By Anne Saint-Eve; Françoise Irlinger; Caroline Pénicaud; Isabelle Souchon; Stéphan Marette
  8. Preferences for meat substitute with plant-based proteins: an experiment with real products consumption By Leplat Mélody; Loheac Youenn; Teillet Eric
  9. Starting small in project choice: A discrete-time setting with a continuum of types By Hua, Xiameng; Watson, Joel
  10. The revealed preferences in the Pozna residential housing market By Justyna Tanas
  11. Stable Marriage, Children, and Intrahousehold Allocations By Mikhail Freer; Khushboo Surana
  12. Measuring insecurity-related experiences and preferences in a fragile State. A list experiment in Mali. By Olivia Bertelli; Thomas Calvo; Emmanuelle Lavallée; Marion Mercier; Sandrine Mesplé-Somps
  13. Measuring the Attractiveness of Trip Destinations: A Study of the Kansai Region By Keisuke Kondo
  14. A Study on the Consumers' Perception and Their Consumption Pattern for Processed Dairy Dairy Products in Karachi By Hasan, Aleshba

  1. By: Michaela V. Gerhardt (University of Kassel); Elke D. Kanberger (University of Kassel); Andreas Ziegler (University of Kassel)
    Abstract: This paper examines the individual preferences for a reduction of life-cycle CO2 emissions in vehicle purchase decisions. The empirical analysis is based on data from a stated choice experiment with more than 1, 100 citizens in Germany that refers to decisions between three types of electric vehicles and a conventional (i.e. gasoline or diesel) vehicle that are characterized by several attributes like purchase price or fuel costs. With respect to CO2 emissions, we specifically examine emissions in vehicle production besides the commonly considered emissions in vehicle use. Our econometric analysis with flexible mixed logit models reveals a strong stated preference for the reduction of CO2 emissions in both vehicle use and production, whereby the estimated willingness to pay for CO2 emission reductions is higher for vehicle production. Furthermore, we find that conventional vehicles are significantly preferred over plug-in hybrid electric vehicles and particularly strongly significantly preferred over extended-range and pure electric vehicles. Surprisingly, environmental attitudes, i.e. environmental awareness and ecological policy identification, have no significant effects on the reduction of CO2 emissions in both vehicle use and production. These results suggest that citizens in Germany with strong environmental identity do not consider reductions of CO2 emissions in vehicle purchase decisions as an important direction for climate protection. Instead, this group rather tends to avoid the purchase of conventional vehicles since environmental attitudes have a significantly positive effect on the stated choice of electric vehicles, whereby this estimated effect is dominated by an ecological policy orientation instead of general environmental awareness. The latter result suggests the strong relevance of the controversial political discussion about the transition to electromobility in Germany. By considering economic preferences, the econometric analysis additionally reveals that individual trust is relevant for the purchase of plug-in hybrid electric vehicles.
    Keywords: Vehicle purchase decisions, CO2 emissions in vehicle use and production, climate protection, electric vehicles, stated choice experiment, mixed logit models
    Date: 2023
  2. By: Bart Cap\'eau; Liebrecht De Sadeleer; Sebastiaan Maes
    Abstract: Empirical welfare analyses often impose stringent parametric assumptions on individuals' preferences and neglect unobserved preference heterogeneity. In this paper, we develop a framework to conduct individual and social welfare analysis for discrete choice that does not suffer from these drawbacks. We first adapt the class of individual welfare measures introduced by Fleurbaey (2009) to settings where individual choice is discrete. Allowing for unrestricted, unobserved preference heterogeneity, these measures become random variables. We then show that the distribution of these objects can be derived from choice probabilities, which can be estimated nonparametrically from cross-sectional data. In addition, we derive nonparametric results for the joint distribution of welfare and welfare differences, as well as for social welfare. The former is an important tool in determining whether the winners of a price change belong disproportionately to those groups who were initially well-off.
    Date: 2023–03
  3. By: Rodemeier, Matthias (Bocconi University)
    Abstract: What do markets for voluntary climate protection imply about people's valuations of en- vironmental protection? I study this question in a large-scale field experiment (N=255, 000) with a delivery service, where customers are offered carbon offsets that compensate for emissions. To estimate demand for carbon mitigation, I randomize whether the delivery service subsidizes the price of the offset or matches the offset's impact on carbon mitigation. I find that consumers are price-elastic but fully impact-inelastic. This would imply that consumers buy offsets but their willingness to pay (WTP) for the carbon it mitigates is zero. However, I show that consumers can be made sensitive to impact through a simple information treatment that increases the salience of subsidies and matches. Salient information increases average WTP for carbon mitigation from zero to 16 EUR/tCO2. Two complementary surveys reveal that consumers have a limited comprehension of the carbon-mitigating attribute of offsets and, as a result, appear indifferent to impact variations in the absence of information. Finally, I show that the widely-used contingent valuation approach poorly captures revealed preferences: Average hypothetical WTP in a survey is 200 EUR/tCO2, i.e., 1, 150% above the revealed preference estimate.
    Keywords: climate change, carbon mitigation, willingness to pay, carbon offsets, contingent valuation, nudging
    JEL: D61 D82 H21 Q51 Q58
    Date: 2023–02
  4. By: Christopher Turansick
    Abstract: We study the repeated choice interpretation of stochastic choice and the individual interpretation of the random utility model. We consider a myopic agent whose distribution over preferences tomorrow potentially depends on their consumption and preference today. Even when the agent is classically rational in each of their static decisions, there are forms of consumption dependence which are inconsistent with random utility as a model of intertemporal aggregation. We offer two characterizations of Markovian consumption dependence which are consistent with random utility. Further, we characterize the behavioral content of consumption dependence in a two period stochastic choice model.
    Date: 2023–02
  5. By: Eric Le Fur (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - UB - Université de Bordeaux); Jean-Francois Outreville
    Abstract: Purpose : The objective of the paper is to investigate the impact of habits and consumption behavior on the willingness to pay (WTP) for cider by surveying young consumers. Method : The analysis is based on a questionnaire distributed to a group of 433 French business students from December 2017 to January 2018. Specifically, the questionnaire is designed to test whether young consumers would pay a premium price or not for quality ciders with respect to a traditional sweet cider with similar characteristics. We are modelling the premium that consumers are willing to pay for an organic cider, a farmer cider and rosé cider. To accommodate the feature of a significant proportion of zero or negative premiums in dependent variables, the Heckman two-stage estimation procedure is performed. Results : Results show that the young generation consider cider as a cheap, festive and non-organic beverage and is willing to pay a premium for quality ciders like specifically rosé and farmer ciders. Conclusion : The results from this research have useful implications not only for the cider market but also in the understanding of the characteristics of competitive beverages that young consumers may prefer and value.
    Date: 2022–02–13
  6. By: Romuald Meango
    Abstract: This paper studies the identification of perceived ex ante returns in the context of binary human capital investment decisions. The environment is characterised by uncertainty about future outcomes, with some uncertainty being resolved over time. In this context, each individual holds a probability distribution over different levels of returns. The paper uses the hypothetical choice methodology to identify nonparametrically the population distribution of several individual-specific distribution parameters, which are crucial for counterfactual policy analyses. The empirical application estimates perceived returns on overstaying for Afghan asylum seekers in Germany and evaluates the effect of assisted voluntary return policies.
    Date: 2023–03
  7. By: Anne Saint-Eve (SayFood - Paris-Saclay Food and Bioproduct Engineering - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Françoise Irlinger (SayFood - Paris-Saclay Food and Bioproduct Engineering - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Caroline Pénicaud (SayFood - Paris-Saclay Food and Bioproduct Engineering - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Isabelle Souchon (SayFood - Paris-Saclay Food and Bioproduct Engineering - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Stéphan Marette (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Consumers are being encouraged to increase the proportion of plant protein in their diets to enhance the sustainability of food systems. One approach is to develop plant-protein-rich foods that are acceptable to consumers. This study examined French people's reactions to cheese alternatives—new fermented products that mixed animal and plant protein sources. We conducted experimental sessions with 240 French participants to assess their responses to three fermented products containing different percentages of yellow pea and cow's milk. First, we asked the participants to blind-taste the three products and solicited hedonic scores of products. We then provided the participants with simple information about the products' composition and asked them to taste and score the liking of the products a second time. We also asked consumers to estimate their willingness to pay (WTP) for each product before and after revealing additional information about the nutritional or environmental benefits of consuming pea-based foods. The product with the lowest percentage of pea and the highest percentage of milk received the highest hedonic scores, and WTP was correlated with the hedonic scores. The additional information about the nutritional and environmental benefits of pea-based foods led to significant increases in WTP for two of the fermented products, but not for the least preferred product, namely the one with the highest percentage of pea. This finding suggests that participant reactions to information depended on hedonic preferences.
    Abstract: Les consommateurs sont encouragés à augmenter la proportion de protéines végétales dans leur alimentation afin d'améliorer la durabilité des systèmes alimentaires. Une approche consiste à développer des aliments riches en protéines végétales acceptables pour les consommateurs. Cette étude examine les réactions des Français face aux alternatives au fromage - de nouveaux produits fermentés mélangeant des sources de protéines animales et végétales. Nous avons mené des sessions expérimentales avec 240 participants français pour évaluer leurs réponses à trois produits fermentés contenant différents pourcentages de pois jaunes et de lait de vache. Tout d'abord, nous avons demandé aux participants de goûter à l'aveugle les trois produits, et nous avons sollicité leur jugement hédonique. Nous avons ensuite fourni aux participants des informations simples sur la composition des produits et leur avons demandé de goûter à nouveau, en notant le goût des produits une seconde fois. Nous avons également demandé aux consommateurs d'estimer leur consentement à payer (CAP) pour chaque produit avant, et après avoir révélé des informations supplémentaires sur les avantages nutritionnels ou environnementaux de la consommation d'aliments à base de pois. Le produit avec le pourcentage le plus bas de pois et le pourcentage le plus élevé de lait a reçu les scores hédoniques les plus élevés, et les CAP étaient corrélés aux scores hédoniques. Les informations supplémentaires sur les avantages nutritionnels et environnementaux des aliments à base de pois ont conduit à des augmentations significatives du CAP pour deux des produits fermentés, mais pas pour le produit le moins préféré, à savoir celui avec le pourcentage le plus élevé de pois. Cette découverte suggère que les réactions des participants à l'information dépendent des préférences hédoniques.
    Keywords: Plant-based product, Consumer behavior, Economic approach, Sensory analysis
    Date: 2021–06
  8. By: Leplat Mélody (L@BISEN - Laboratoire ISEN - Institut supérieur de l'électronique et du numérique (ISEN) - YO - YNCREA OUEST); Loheac Youenn (ESC [Rennes] - ESC Rennes School of Business); Teillet Eric (SensoStat)
    Keywords: meat substitutes, sensory evaluation, choices experiment, real products
    Date: 2022–06–30
  9. By: Hua, Xiameng; Watson, Joel
    Keywords: Project choice, Principal-agent, Renegotiation, Starting small, Gradualism, Perfect Bayesian equilibrium, Economic Theory, Other Economics
    Date: 2022–09–01
  10. By: Justyna Tanas
    Abstract: The purpose of this article is to determine the revealed preferences of buyers in the secondary housing market in Pozna in 2010-2018 by age, gender, and marital status. The study was conducted based on data on transactions of real estate premises made on the secondary market in 2010-2018 in Pozna. These data were supplemented with the information contained in the Land Register (section II - ownership), in the real estate cadastre and using Google Street View. Based on hedonic models and unique datasets of over 30 thousand observations, the revealed preferences were investigated more thoroughly than before.
    JEL: R3
    Date: 2022–01–01
  11. By: Mikhail Freer; Khushboo Surana
    Abstract: We present a revealed preference framework to study sharing of resources in households with children. We explicitly model the impact of the presence of children in the context of stable marriage markets under both potential types of custody arrangement - joint custody and sole custody. Our models deliver testable revealed preference conditions and allow for the identification of intrahousehold allocation of resources. Empirical applications to household data from the Netherlands (joint custody) and Russia (sole custody) show the methods' potential to identify intrahousehold allocation.
    Date: 2023–02
  12. By: Olivia Bertelli (DIAL, LEDa, IRD, Université Paris-Dauphine, Université PSL); Thomas Calvo (Université Paris-Dauphine, PSL University, CNRS UMR8007, IRD UMR260, LEDa, DIAL); Emmanuelle Lavallée (DIAL, LEDa, IRD, Université Paris-Dauphine, Université PSL); Marion Mercier (Université Paris-Dauphine, PSL University, CNRS UMR8007, IRD UMR260, LEDa, DIAL); Sandrine Mesplé-Somps (IRD, Université Paris-Dauphine, PSL Research University, CNRS, LEDa, DIAL)
    Abstract: Measuring behaviors and preferences in times of conflict is of great interest for understanding conflict dynamics and designing conflict-resolution interventions. Yet, data users often cast doubts on the reliability of sensitive self-reported measures, especially in fragile contexts. We study sensitive experiences and preferences related to insecurity in a fragile State – Mali – by explicitly addressing potential response biases using a List Experiment (LE) method. We survey 1, 500 individuals across the entire country and randomly assign respondents to answer sensitive questions through the LE or direct questions (DQ) techniques to measure response biases. We focus on three experience-related items (physical assault victimization, firearms’ possession, willingness to engage in violence) and two preference-related items (support for the military regime and trust in foreign armed forces in Mali). Results show significant biases affecting responses about preference-related items. Our analysis confirms that popular support for the military regime and mistrust in the foreign armed forces are large, but suffer from a substantial overestimation. Misreporting is not uniformly distributed across the population, but varies depending on gender, education and conflict exposure. Further results suggest that such heterogeneity in response bias can yield fake significant correlations between individual characteristics and sensitive items’ prevalence rates depending on the survey technique used.
    Keywords: Survey method, Measurement bias, Fragile State, Africa, Mali
    JEL: C83 D74 O55
    Date: 2023–03
  13. By: Keisuke Kondo (Research Institute of Economy, Trade and Industry and Research Institute for Economics and Business Administration, Kobe University, JAPAN)
    Abstract: This study proposes a novel concept of regional attractiveness index based on human mobility flows. Assuming that individuals' mobility choice is based on utility maximization, this study aims to recover the attractiveness of trip destinations by estimating the gravity equation for interregional trip flows. Using data from a Person Trip Survey in the Kansai region of Japan, this study investigates whether different trip purposes (e.g., commuting to office and school, recreational trips, business trips, and returning home) can reveal variations in the attractiveness of trip destinations in a geographical space. This study found that the proposed approach using interregional trip flows can effectively capture the extent to which trip destinations attract people from a region-wide perspective. As real-time human mobility data becomes increasingly available in the age of Big Data, the new index of regional attractiveness is expected to become a key performance indicator for daily monitoring of urban and regional economies.
    Keywords: Regional attractiveness index; Person trip survey; Gravity equation
    JEL: J61 R23 R41
    Date: 2023–03
  14. By: Hasan, Aleshba
    Abstract: The topic of the project selected for the market research is “Consumer’s perception and their Consumption pattern for Processed Dairy products in Karachi”. This study revolves around the dairy industry and focuses mainly on the Processed dairy products, namely milk, butter and yogurt. Since all these products depend on milk for their production therefore milk is the focal point of the study. The object of selecting this topic for research is to perform an in-depth study of the prevailing situation of the Processed dairy products and its potential to grow in the Karachi market. Also this research will shed light on the major factors such as Advertising, Quality, and Taste etc which determine the perception of the consumers about the focused dairy products. The study also determines the reasons why or why not consumers prefer Processed dairy milk over Open milk. To gather the required data for the study a questionnaire was developed, a sample of 100 respondents were taken randomly, of which 20 were interviewed and their response was carefully recorded. During the course of market research, some interesting features of the marketing have been noticed and much knowledge was gained about the different consumer’s perception and their consumption pattern for processed dairy products. The market study has also identified the potential customers for processed dairy products who are currently purchasing Open dairy products. The overall findings based on the results of the questionnaire and personal interviews indicates that the processed dairy industry needs to work a lot on creating awareness for its products by educating the consumers of its benefits. Also they should focus on the potential customers who can be made actual customers by enhancing their Marketing, Advertising and Pricing strategies. The Availability of the product is also an important issue that needs to be worked on. Hence it can be said that the Processed dairy products have a bright future scope and a great potential in the Karachi market.
    Keywords: Processed Diary
    JEL: M3
    Date: 2023–02–11

This nep-dcm issue is ©2023 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.