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on Discrete Choice Models |
| By: | Mohapatra, Debashrita |
| Keywords: | Industrial Organization, Research Methods/Statistical Methods, Demand And Price Analysis |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343538 |
| By: | Denis Charles; Magali Dumontet; Meglena Jeleva; Johanna Etner |
| Abstract: | Term life insurance contracts differ from one another: private information level asked to applicants, options presence in the contract, or claim payment type. Understanding how individuals’ demand is influenced by these possibilities is not straightforward. We explore socioeconomic and behavioral characteristics that might influence term life insurance demand through a Discrete Choice Experiment (DCE). On a sample representative of the French population, we estimate individuals’ characteristics that influence (1) term life insurance purchasing decision and (2) Willingness to Pay for each feature of the contract without testing new features directly in the market. In addition to socioeconomic characteristics, behavioral factors permit to better understand overall demand for term life insurance product as well as characteristics of such contract. Future concerns, optimism about survival, perceived asset management risk, and altruism influence term life insurance purchasing behavior. |
| Keywords: | Term Life Insurance, Discrete Choice Experiment, Willingness to Pay, Individual Preferences |
| JEL: | C83 D12 G22 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-23 |
| By: | Cattaneo, Maria Alejandra (Swiss Co-ordination Center for Research in Education); Gschwendt, Christian (University of Bern); Wolter, Stefan C. (University of Bern) |
| Abstract: | Advances in technology have always reshaped labor markets. Automating human labor has lead to job losses and creation but most of all, for an increasing demand for highly skilled workers. However, emerging AI innovations like ChatGPT may reduce labor demand in high skilled occupations previously considered "safe" from automation. While initial studies suggest that individuals adjust their educational and career choices to mitigate automation risk, it is unknown what people would be willing to pay for a reduced automation risk. This study quantifies this value by assessing individuals' preferences for occupations in a discrete-choice experiment with almost 6'000 participants. The results show that survey respondents are willing to accept a salary reduction equivalent to almost 20 percent of the median annual gross wage to work in an occupation with a 10 percentage point lower risk of automation. Although the preferences are quite homogeneous, there are still some significant differences in willingness to pay between groups, with men, younger people, those with higher levels of education, and those with a higher risk tolerance showing a lower willingness to pay for lower automation risk. |
| Keywords: | artificial intelligence, automation, willingness to pay, survey experiment |
| JEL: | J24 O33 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17097 |
| By: | Bazoche, Pascale; Angeon, Valérie |
| Abstract: | Product qualification and differentiation processes based on environmental attributes are part of the process of the ecologisation of food systems. They provide a better understanding of food consumption behaviour, insofar as they help to promote sustainable production systems. These issues are particularly relevant in the French West Indies, where consumers make little use of objective quality signals such as labels, brands or sustainability claims. To assess consumer sensitivity to the environmental attributes of fruit and vegetables, a real choice experiment was conducted with a sample of 88 Guadeloupean consumers. Assessments produced by a mixed logit model showed that price had a significant discriminating impact on the utility of products for consumers. The results also reveal that consumers expressed a preference for environmental attributes that varied according to the type of product. We observed that sensory perception is influenced by the recognition of quality labels and that local production is not associated with respect for the environment. |
| Keywords: | Demand and Price Analysis, Food Consumption/Nutrition/Food Safety |
| Date: | 2024–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:ags:inrasl:344172 |
| By: | Ghorpade, Yashodhan (World Bank); Jasmin, Alyssa (World Bank); Rahman, Amanina Abdur (World Bank) |
| Abstract: | The changing nature of work, accelerated by the experience of the COVID-19 pandemic has resulted in several fundamental shifts in the terms and conditions of work. Overlain with a clear trend of increased non-standard employment, including through the gig economy and platform work, this poses critical questions for policies and practices of the organization of work arrangements, and about who may bear the costs of emerging arrangements. We attempt to understand whether workers in freelancing and in standard work arrangements in Malaysia view a trade-off between flexibility and income and are willing to forgo a share of earnings for greater flexibility. We deploy a novel discrete choice experiment in which respondents are asked to choose their preferred job from two hypothetical job descriptions with randomly assigned attributes viz. flexibility, and associated earnings. We find substantial but not overwhelming preference for greater flexibility, especially among freelancers, and a clear trade-off between measures of flexibility and income. We also find considerable variation in the preference for flexibility, much of which is not explained by worker demographics and other observable characteristics but is consistent with other measures of the importance attached to flexibility and earning income. Our analysis outlines pathways through which offering even a modicum of flexibility can enhance workers' utility without necessarily increasing costs for employers and provide evidence of considerable preference heterogeneity and warns against imposing uniform approaches to (in)flexible work arrangements. |
| Keywords: | flexibility, flexible work arrangements, gig work |
| JEL: | J30 J32 M52 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17093 |
| By: | Jens Horbach (Technical University of Applied Sciences Augsburg, School of Business, Friedberger Straße 4, D-86161 Augsburg) |
| Abstract: | The success of a green energy transition is highly dependent on the household sector as one of the most important energy users. Private heating, electricity consumption or private transport are important key levers to reduce households´ energy use and its impacts on cli-mate change. The paper analyses the determinants of energy related attitudes and activities of households based on econometric estimations of European and German survey data. The results show that personal factors such as female gender and a high income are positively correlated to green energy behaviour. Highly qualified persons are more likely to realize green energy related measures. People having difficulties to pay their bills are significantly more likely to use energy friendly public transport, but they have a lower willingness to pay for energy saving measures compared to richer groups. |
| Keywords: | Green energy behaviour, climate change, European data, multivariate probit model |
| JEL: | C25 D12 D91 Q41 Q54 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0224 |
| By: | Radosveta Ivanova-Stenzel (TU Berlin); Michel Tolksdorf (TU Berlin) |
| Abstract: | We suggest a simple method to elicit individual preferences for algorithms. By altering the monetary incentives for ceding control to the algorithm, the menu-based approach allows for measuring, in particular, the degree of algorithm aversion. Using an experiment, we elicit preferences for algorithms in an environment with measurable performance accuracy under two conditions|the absence and the presence of information about the algorithm's performance. Providing such information raises subjects' willingness to rely on algorithms when ceding control to the algorithm is more costly than trusting their own assessment. However, algorithms are still underutilized. |
| Keywords: | algorithm aversion; delegation; experiment; preferences; |
| JEL: | C91 D83 D91 |
| Date: | 2024–07–30 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:508 |
| By: | Navin Kartik; Andreas Kleiner |
| Abstract: | For multidimensional Euclidean type spaces, we study convex choice: from any choice set, the set of types that make the same choice is convex. We establish that, in a suitable sense, this property characterizes the sufficiency of local incentive constraints. Convex choice is also of interest more broadly. We tie convex choice to a notion of directional single-crossing differences (DSCD). For an expected-utility agent choosing among lotteries, DSCD implies that preferences are either one-dimensional or must take the affine form that has been tractable in multidimensional mechanism design. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.19063 |
| By: | Kim, Da Eun; Ellison, Brenna |
| Keywords: | Food Consumption/Nutrition/Food Safety, Consumer/ Household Economics |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343811 |
| By: | Gurung, Suraj; Chen, Lijun |
| Keywords: | Agribusiness, Food Consumption/Nutrition/Food Safety, Marketing |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:344012 |
| By: | Nail Kashaev, Martin Plávala and Victor H. Aguiar (Simon Fraser University) |
| Abstract: | We investigate joint probabilistic choice rules describing the behavior of two decision makers, each facing potentially distinct menus. These rules are separable when they can be decomposed into individual choices correlated solely through their respective probabilistic choice rules. Despite its significant interest for the study of peer effects, influence, and taste variation, a complete characterization of these rules has remained elusive (Chambers, Masatlioglu, and Turansick, 2021). We fully characterize separable choices through a finite system of inequalities inspired by Afriat’s theorem. Our results address the possibility of entangled choices, where decision makers behave as if they do not communicate, yet their choices are not separable. More generally, we establish that separable joint choice restrictions can be factored into individual choice restrictions if only if at least one decision maker’s probabilistic choice rule uniquely identifies the distribution over deterministic choice rules. The no communication condition and the individual restrictions are no longer sufficient in the absence of this uniqueness. Our results offer robust tools for distinguishing between separable decision-making and behaviors beyond mere peer effects such as imitation and cheating. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:sfu:sfudps:dp24-03 |
| By: | Evans, Alecia; Sesmero, Juan Pablo |
| Keywords: | Agribusiness, Agricultural And Food Policy, Industrial Organization |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343956 |
| By: | Holden, Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Tione, Sarah (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Tilahun, Mesfin (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Katengeza, Samson (Centre for Land Tenure Studies, Norwegian University of Life Sciences) |
| Abstract: | We study risky inter-temporal choice in a large random student sample (n=721) and a large rural sample (n=835) in Malawi. All respondents were exposed to the same 20 Multiple Choice Lists with a rapid elicitation method that facilitated the identification of near-future Certainty Equivalents of future risky prospects placed 6, 12, and 24 months into the future. The probabilities of winning in the risky future prospects varied and facilitated the estimation of probability weighting functions for the risky prospects placed 6 and 12 months into the future. The experiment is used to test whether decision errors can explain or be highly correlated with hyperbolic discounting and non-linear (inverse-S-shaped) probability weighting. We find evidence that decision errors are strongly correlated with hyperbolic discounting but do not find that decision errors are correlated with the strong inverse-S-shaped probability weighting (w(p)) patterns in our two samples. We find stronger S-shaped and more pessimistic w(p) functions for 6-month horizon risky prospects than for 12-month horizon risky prospects in both samples. Both patience and optimism bias contribute to subjects taking higher risks related to more risky distant future prospects. This can lead to the postponement of climate action. |
| Keywords: | Decision errors; discounting; risky inter-temporal choice; probability weighting; Malawi |
| JEL: | C91 C93 D81 D84 D91 |
| Date: | 2024–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nlsclt:2024_003 |
| By: | Atallah, Shadi S.; Yan, Yizun |
| Keywords: | Land Economics/Use |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343860 |
| By: | Alem, Yonas (University of Gothenburg & Jameel Poverty Action Lab, J-PAL); Loeser, John (Development Impact Evaluation, World Bank); Mahajan, Aprajit (University of California, Berkeley) |
| Abstract: | The implications of commonly used money earlier or later (MEL) games for intertemporal behavior depend critically upon subjects’ choice bracketing. If subjects bracket narrowly, responses reflect preferences independent of subjects’ financial environment. Alternatively, if subjects bracket broadly, responses reflect subjects’ marginal returns to investment. We test both hypotheses in a lab-in-the-field experiment, which involves repeated MEL games, a large unconditional cash transfer, and an illiquid savings product. Subjects do not narrowly bracket – randomized cash transfers induce greater patience in MEL choices. Subjects do not broadly bracket either – they fail to arbitrage across equivalent MEL and savings opportunities. We provide a conceptual framework and present evidence that narrowly bracketing subjects drive the predictive power of MEL outcomes for financial choices, justifying the common practice of interpreting MEL choices as a proxy for time preferences rather than financial environment. |
| Keywords: | Time preferences; narrow bracketing; broad bracketing |
| JEL: | C93 D03 D11 D90 |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunefd:2024_009 |
| By: | Suguru Otani; Tohya Sugano |
| Abstract: | We highlight that match fixed effects, represented by the coefficients of interaction terms involving dummy variables for two elements, lack identification without specific restrictions on parameters. Consequently, the coefficients typically reported as relative match fixed effects by statistical software are not interpretable. To address this, we establish normalization conditions that enable identification of match fixed effect parameters as interpretable indicators of unobserved match affinity, facilitating comparisons among observed matches. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.18913 |
| By: | Werbeck, Anna |
| Abstract: | Hypothetical bias is the discrepancy between stated preferences and actual choices. As such, it is one of the key issues regarding the use of hypothetical survey methods and therefore highly relevant for economists in understanding human behavior and refining policy interventions. Hypothetical survey methods are often used to inform our view on decision making in health and financial settings. However, there is limited understanding of the extent and underlying factors of hypothetical bias within the context of health insurance. This study contributes to this understanding and explores the extent of hypothetical bias and its correlation with personality traits and behavioral patterns in a health insurance setting. Using large-scale survey data in tandem with detailed information on health plans, I show that the majority of enrollees overestimate their willingness to switch health plans when facing a price increase: 64% show hypothetical bias. Especially conscientious, impulsive or negative reciprocal individuals are prone to hypothetical bias. In contrast, internal locus of control correlates with consistent preferences. These findings can help refine mitigation strategies and assess the reliability of stated preferences. |
| Abstract: | Der hypothetische Bias ist die Diskrepanz zwischen angegebenen Präferenzen und tatsächlichen Entscheidungen. Als solcher ist er eines der zentralen Probleme bei der Verwendung von Umfragedaten und daher für Ökonomen von hoher Relevanz, um menschliches Verhalten zu verstehen und politische Interventionen zu verfeinern. Umfragen werden häufig genutzt, um Präferenzen im Gesundheits- und Finanzkontext abzufragen. Kentnisse über das Ausmaß und die zugrunde liegenden Faktoren von hypothetischem Bias grade im Kontext von Krankenversicherungen sind derzeit jedoch noch begrenzt. Diese Studie setzt hier an und untersucht das Ausmaß des hypothetischen Bias und dessen Korrelation mit Persönlichkeitsmerkmalen und Verhaltensmustern im Kontext einer Krankenversicherungsreform. Die Studie zeigt, dass die Mehrheit der Krankenversicherten ihre Bereitschaft, bei einer Preiserhöhung den Versicherungsplan zu wechseln, überschätzt: 64% zeigen hypothetischen Bias. Besonders gewissenhafte, impulsive oder negativ reziproke Personen neigen eher dazu in ihren Handlungen von den angegebenen Präferenzen abzuweichen. Personen mit hoher interner Kontrollüberzeugung neigen eher zu konsistenten Präferenzen. |
| Keywords: | Behavioral, hypothetical bias, finance, health insurance |
| JEL: | D91 G40 I13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:300648 |
| By: | Vienneau, Robert L. |
| Abstract: | This article describes a diagram that depicts how the analysis of the choice of technique varies with perturbations of selected parameters in models of production of commodities. Fluke switch points partition the graph. Three examples are provided, of circulating capital with markup pricing, of fixed capital with structural economic dynamics, and of intensive rent with markup pricing. |
| Keywords: | Choice of technique; Fixed Capital; Rent; Markup Pricing |
| Date: | 2024–07–22 |
| URL: | https://d.repec.org/n?u=RePEc:ris:sraffa:0066 |
| By: | Hu, Chenyue |
| Keywords: | Economics, Applied Economics, Home bias in open economy macro models, Portfolio choice in DSGE frameworks, Macro aspects of finance and trade, Applied economics, Econometrics, Economic theory |
| Date: | 2023–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:ucscec:qt8nh9t5zs |