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on Discrete Choice Models |
| By: | Christian Belzil (CREST, CNRS, Paris Polytechnic Institute, IZA, CIRANO); Tomáš Jagelka (University of Bonn, Dartmouth College, CREST-Ensae, IZA) |
| Abstract: | We develop a micro-founded framework for accounting for individuals' effort and cognitive noise which confound estimates of preferences based on observed behavior. Using a large-scale experimental dataset we estimate that failure to properly account for decision errors due to (rational) inattention on a more complex, but commonly used, task design biases estimates of risk aversion by 50% for the median individual. Effort propensities recovered from preference elicitation tasks generalize to other settings and predict performance on an OECD-sponsored achievement test used to make international comparisons. Furthermore, accounting for endogenous effort allows us to empirically reconcile competing models of discrete choice. |
| Keywords: | Preferences, risk preference, stochastic choice models, endogenous effort, cognitive noise, task complexity, experimental design |
| JEL: | D91 C40 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:350 |
| By: | Johansson, Magnus (Swedish National Road and Transport Research Institute (VTI)) |
| Abstract: | This study investigates the determinants influencing the choice of ports by shipowners routing container vessels to Swedish ports. Given Sweden's reliance on maritime transport for trade, understanding these factors is important for port authorities and policymakers to enhance port attractiveness and strengthen the national port network. The research focuses on the container market, ensuring a homogeneous product for analysis. The study employs a mixed logit model to analyze data from 2017 to 2019, including official statistics on vessel calls and AIS (automatic identification system for tracking vessel movements) data for turnaround times. Key variables considered include distance between ports, port size, port reliability, port load (the number of vessels being handled at the same time), vessel size, number of containers and if the upcoming call also is domestic. Results indicate that distance (distance cost), pilot fees, port size, and port load affect port choice, with the choice of port for smaller vessels being more sensitive to transport costs. The study also highlights the impact of repeated domestic calls on port attractiveness. The findings provide valuable insights for optimizing port operations and developing strategic policies to enhance Sweden's maritime trade infrastructure. |
| Keywords: | Port choice; Container ports; Mixed logit; AIS data |
| JEL: | R42 R42 |
| Date: | 2024–11–29 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:vtiwps:2024_007 |
| By: | Islem Saadaoui (TVES - Territoires, Villes, Environnement & Société - ULR 4477 - ULCO - Université du Littoral Côte d'Opale - Université de Lille) |
| Abstract: | This study explores the economic value of Aleppo pine forests, a unique and threatened ecosystem in the border region of central Tunisia. These forests play a vital role in supporting small rural communities, but face increasing pressures and restrictions on their use. This research aims to assign a monetary value to forest conservation, considering the region's specific socio-economic context. Strategies for empowering local residents as key actors in developing sustainable cross-border initiatives are further investigated. Employing the Contingent Valuation Method, a survey of 350 local residents and international users was conducted to assess their Willingness to Pay for forest conservation efforts. Logistic regression analysis revealed that sociodemographic factors, such as monthly income and preferred payment method, significantly influence both and the likelihood of participation. These findings highlight the feasibility and importance of reconciling economic development with ecological sustainability in this critical region. |
| Keywords: | Economic assessment Ecosystem service Regional planning Cross-border development initiative Contingent valuation method, Economic assessment, Ecosystem service, Regional planning, Cross-border development initiative, Contingent valuation method |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04849786 |
| By: | Bernard M.S. van Praag (University of Amsterdam and Tinbergen Institute); J. Peter Hop; William H. Greene (University of South Florida) |
| Abstract: | In the last few decades, the study of ordinal data in which the variable of interest is not exactly observed but only known to be in a specific ordinal category has become important. In Psychometrics such variables are analysed under the heading of item response models (IRM). In Econometrics, subjective well-being (SWB) and self-assessed health (SAH) studies, and in marketing research, Ordered Probit, Ordered Logit, and Interval Regression models are common research platforms. To emphasize that the problem is not specific to a specific discipline we will use the neutral term coarsened observation. For single-equation models estimation of the latent linear model by Maximum Likelihood (ML) is routine. But, for higher -dimensional multivariate models it is computationally cumbersome as estimation requires the evaluation of multivariate normal distribution functions on a large scale. Our proposed alternative estimation method, based on the Generalized Method of Moments (GMM), circumvents this multivariate integration problem. The method is based on the assumed zero correlations between explanatory variables and generalized residuals. This is more general than ML but coincides with ML if the error distribution is multivariate normal. It can be implemented by repeated application of standard techniques. GMM provides a simpler and faster approach than the usual ML approach. It is applicable to multiple -equation models with K-dimensional error correlation matrices and Jk response categories for the k-th equation. It also yields a simple method to estimate polyserial and polychoric correlations. Comparison of our method with the outcomes of the Stata ML procedure cmp yields estimates that are not statistically different, while estimation by our method requires only a fraction of the computing time. |
| Keywords: | ordered qualitative data, item response models, multivariate ordered probit, ordinal data analysis, generalized method of moments, polychoric correlations, coarsened events |
| JEL: | C13 C15 C24 C25 C26 C33 C34 C35 |
| Date: | 2024–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240075 |
| By: | Jean-Sébastien Lenfant (PRISM, Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | The purpose of this article is to provide a historical account of the contributions to judgment and decision making by four cognitive psychologists at the turn of the 1970s: Sarah Lichtenstein, Paul Slovic, Amos Tversky and Daniel Kahneman. Beyond the usual focus on Kahneman and Tversky's heuristics and biases approach, we uphold that historians of behavioral economics would gain from a broader and more balanced view of the contributions of these four psychologists to the theory of decision making. Together with the heuristics and biases approach, experiments on preference reversal and choice intransitivities represent a multifaceted criticism of standard theories of choice and decision against which the genesis of behavioral economics could be evaluated. |
| Keywords: | Lichtenstein (Sarah), Slovic (Paul), Tversky (Amos), Kahneman (Daniel), heuristics and biases, preference reversal, intransitivity, preferences, behavioral economics, conjoint measurement, judgment, expected utility theory, mathematical psychology, cognitivism, experiments |
| JEL: | B21 B29 D91 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-31 |
| By: | Olivier Armantier (Chapman University - Economic Science Institute); Sebastian Doerr (Bank for International Settlements; Centre for Economic Policy Research (CEPR)); Jon Frost (Bank for International Settlements (BIS)); Andreas Fuster (École Polytechnique Fédérale de Lausanne (EPFL); Swiss Finance Institute; Centre for Economic Policy Research (CEPR)); Kelly Shue (Yale School of Management; National Bureau of Economic Research (NBER)) |
| Abstract: | Many digital applications rely on the willingness of users to voluntarily share personal data. Yet some users are more comfortable sharing data than others. To document these differences, we draw on questions to a representative sample of U.S.\ households added to the New York Fed's Survey of Consumer Expectations. We find that women are less willing than men, and older individuals less willing than the young, to share their financial transaction data in exchange for better offers on financial services. Across these groups, there are significant differences in attitudes, such as willingness to take financial risks, concerns that data will become publicly available, and concerns around personal safety. Responses suggest that privacy regulation can increase the willingness to share data, but effects do not differ by gender. |
| Keywords: | data, privacy, CCPA, fintech, big tech, survey of consumer expectations |
| JEL: | C8 D8 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2499 |
| By: | Yashvant R Premchand (Vrije Universiteit Amsterdam and TNO); Henri L.F. de Groot (Vrije Universiteit Amsterdam and Tinbergen Institute); Thomas de Graaff (Vrije Universiteit Amsterdam and Tinbergen Institute); Eric Koomen (Vrije Universiteit Amsterdam and Tinbergen Institute) |
| Abstract: | Land subsidence which is primarily driven by water management practices and enhanced by increasing droughts is a growing global concern that affects the environment, infrastructure, and housing. In the Netherlands, subsidence damages houses and their foundations, resulting in high costs of repair for homeowners. However, public awareness remains limited about individual vulnerability and financial impact. This study aims to identify the link between land subsidence and house prices. Using over 100, 000 housing transactions from 2000–2022 and detailed subsidence data, we find an average price discount of 2.3–5.0% for houses exposed to land subsidence, with larger effects for houses constructed before 1970 for which foundation damage is more prominent. Our findings suggest that, even with limited information and low societal urgency, homebuyers do consider the potential damage of land subsidence in expressing their willingness to pay for a house, especially after recent droughts. |
| Keywords: | Land subsidence, Water management, House prices, Hedonic pricing, Climate adaptation |
| JEL: | Q54 R11 R14 R21 R31 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240073 |
| By: | Cai, Liang; Song, Guangwen; Zhang, Yanji |
| Abstract: | Objectives Although the social disorganization tradition emphasizes the role of neighborhood context in shaping delinquent behaviors and neighborhood crime, researchers have rarely considered the influence of neighborhood context on criminals’ decision of where to offend. This study explicitly examines how concentrated disadvantage in both the origin and destination neighborhoods structures burglars’ preference for street physical disorder and spatial familiarity. Methods We measure observed and perceived physical disorder from 107, 858 street view images using computer vision algorithms. Geo-referenced mobile phone flows between 1, 642 census units are used to approximate offenders’ potential spatial knowledge about target neighborhoods. Discrete choice models are estimated separately for burglars from disadvantaged and non-disadvantaged neighborhoods (N=1, 972). Results While burglars residing in non-disadvantaged neighborhoods are not sensitive to physical disorder in non-disadvantaged target neighborhoods, they strongly avoid disadvantaged neighborhoods with disorder. Conversely, residents of neighborhoods with concentrated disadvantage swiftly act upon street disorder in better-off neighborhoods but not in disadvantaged neighborhoods. These tendencies to react to the presence of physical disorder on the street are also contingent on burglars’ potential familiarity with the target environment. Conclusions We highlight the importance of larger neighborhood structural characteristics and their interactions with spatial knowledge and environmental conditions such as visual signs of disorder, in criminal decision making. Physical disorder is not uniformly indicative of decay across neighborhoods and offenders. This divergent decision-making may also partially explain spatial heterogeneity of crime. Moreover, spatial knowledge is most effective in triggering or deterring actions in places that are categorically different from offenders’ residential spaces. |
| Date: | 2024–12–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:rcny3 |
| By: | Lind, Joar (Swedish National Road and Transport Research Institute (VTI)) |
| Abstract: | The Swedish container port markets are analysed using the concept of captive and contestable hinterland and foreland. Using a freight transport planning tool, the Swedish national freight transport model Samgods, we identify the geographical markets of Swedish container ports and their market shares for the municipalities of Sweden. Results from the proposed method indicate that within the market segment, about half of municipalities in Sweden are captive, about a third is tied to the market-leading port. In the future, the market segment tends to be more captive, and the market-leading port will strengthen its position. |
| Keywords: | Port competition; Freight transport modelling; Hinterland; Port choice; Captive or contestable areas |
| JEL: | R41 R42 |
| Date: | 2024–11–29 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:vtiwps:2024_006 |
| By: | Ologunebi, John; Taiwo, Ebenezer; All, Kazeem |
| Abstract: | This research investigates digital consumer behavior in e-commerce through a comparative case study of Amazon and Temu's customer purchase decision-making processes in the UK and USA. As e-commerce continues to revolutionize retail landscapes, understanding the nuances of consumer behavior within digital environments is critical for businesses aiming to optimize marketing strategies and enhance user experiences. This study aims to shed light on how distinct elements such as consumer demographics, perceived value, and user experience influence purchasing decisions on these two platforms. The study utilizes a quantitative approach to gather insights from consumers who actively shop on Amazon and Temu. The survey captures demographic information and purchasing habits, while interviews provide deeper narratives about decision-making motivations and experiences. Key factors being explored include product variety, pricing strategies, brand loyalty, the impact of online reviews, and the role of personalization in the shopping experience. Preliminary findings suggest distinct consumer behavior patterns between the two platforms. Amazon functionalities such as advanced algorithms, extensive product offerings, and established brand trust appear to significantly influence customer loyalty and repeat purchases. Conversely, Temu's focus on low prices, foreign product access, and aggressive promotional strategies resonate particularly with cost-conscious shoppers, especially those in younger demographics keen on exploring new trends. These factors significantly alter how consumers engage with the brands and impact their overall satisfaction and likelihood of future purchases. This research also explores the geographic nuances of consumer behavior, highlighting how cultural differences between the UK and USA shape online shopping preferences and behaviors. The findings indicate that while both markets exhibit a reliance on price competitiveness, UK consumers may prioritize product quality and sustainability over sheer cost, whereas USA consumers display a greater inclination toward convenience and extensive product variety. The outcomes of this study have substantial implications for e-commerce businesses, suggesting tailored marketing strategies that consider the distinctive attributes of each platform and regional consumer preferences. By deepening the understanding of digital consumer behavior, this research contributes to existing literature on e-commerce and provides practical insights for enhancing customer engagement and satisfaction in an increasingly competitive digital marketplace. |
| Keywords: | Digital consumer behavior, Digital marketing strategies, E-commerce trends, Customer Purchase Decision, Digital marketing, Online shopping, Online Buying Behavior, Brand Loyalty, Understanding consumer psychology |
| JEL: | M30 M31 M37 M39 |
| Date: | 2024–12–25 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123096 |