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on Discrete Choice Models |
| By: | Pandit, Ram; Burton, Michael P.; Zander, Kerstin K.; Garnett, Stephen T.; Pannell, David P. |
| Abstract: | Ecosystem Accounting (EA) involves tracking the extent, condition, and services provided by ecosystems and linking them to the economy under the international standard developed by the United Nations – System of Environmental-Economic Accounting. Ecosystem assets (species, ecosystems and ecological communities) provide use and non-use benefits to society. A key challenge is how to value non-market benefits that arise from these assets. This study aims to contribute to this challenge by estimating the marginal willingness to pay for key ecosystem assets in the Gunbower-Koondrook-Perricoota (GKP) Forest Icon Site in the Murray-Darling Basin of Australia, as a necessary precursor to identifying an exchange price, from which to derive exchange values. A discrete choice experiment with three types of ecosystem assets as attributes was designed and implemented among the Australian public in 2021. The ecosystem asset attributes were six threatened species (Australian bittern, Painted honeyeater, Superb parrot, Koala, Green-comb spider-orchid, Winged pepper-cress), three ecosystem types (River-swamp wallaby grass, River red gum, Black box) and two species groups or ecological communities (water birds and vascular plants). Collected data was analysed using a mixed-logit model. Findings suggest that the estimated marginal willingness-to-pay (WTP) for improvement in status (population or habitat condition index) of ecosystem assets vary from AU$14.60 per year per household for 20 years for water birds to AU$1.32 for Green-comb spider-orchid. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2025–05–05 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uwauwp:356762 |
| By: | Högn, Celina (affiliation not available); Mayer, Lea (affiliation not available); Rincke, Johannes (University of Erlangen-Nuremberg); Winkler, Erwin (University of Erlangen-Nuremberg) |
| Abstract: | This paper examines preferences for gender diversity among co-workers. Using stated-choice experiments with 5, 400 PhD students and university students in Germany, we uncover a substantial willingness to pay (WTP) for gender diversity of up to 5% of earnings on average. Importantly, we find that women have a much higher WTP for gender diversity than men. While the WTP differs by career ambition, competitiveness, and family preferences, we find that gender differences in traits and preferences cannot explain gender differences in the WTP for diversity. Our findings provide an explanation for differential sorting of men and women into high-profile jobs based on the share of female co-workers. |
| Keywords: | gender differences, preferences, willingness to pay, stated choice experiment, gender diversity |
| JEL: | J16 J24 J31 J33 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17750 |
| By: | Weijia (Daisy) Dai; Ginger Zhe Jin; Ben Zou |
| Abstract: | Nutritional disparities across socioeconomic groups contribute to health inequality in the U.S. This paper studies the role of heterogeneous consumer preferences in food choices and explores pricing policies that can promote healthier eating among disadvantaged consumers. Using detailed transaction-level data from a large fast-food restaurant chain, we show that consumers in disadvantaged neighborhoods tend to choose less healthy, higher-calorie items. We estimate a mixed logit discrete choice model to identify consumer preference heterogeneity across demographic groups. Lower-SES consumers display higher price sensitivity across items with varying nutritional quality and show flexibility in substituting between healthy and less healthy options. Counterfactual simulations show that modest, targeted price adjustments in disadvantaged neighborhoods can be an effective tool to reduce nutritional disparities across neighborhoods, with little impact on restaurant revenue or profits. |
| JEL: | D12 I12 I14 L83 R20 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33706 |
| By: | Tanay Raj Bhatt |
| Abstract: | In a typical model of private information and choice under uncertainty, a decision maker observes a signal, updates her prior beliefs using Bayes rule, and maximizes her expected utility. If the decision maker's utility function satisfies the single crossing property, and the information structure is ordered according to the monotone likelihood ratio, then the comparative statics exhibit monotonicity with respect to signals. We consider the restrictions placed by this model of signal processing on state conditional stochastic choice data. In particular, we show that this model rationalizes a state conditional stochastic choice dataset if and only if the dataset itself is ordered according to the monotone likelihood ratio. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.03985 |
| By: | Thomas Dohmen; Georgios Gerasimou |
| Abstract: | We ask if participants in a choice experiment with repeated presentation of the same menus and no feedback provision: (i) learn to behave in ways that are closer to the predictions of ordinal and expected utility theory under strict preferences; or (ii) exhibit overall behaviour that is consistent with utility theory under weak preferences. To answer these questions we design and implemented a free-choice lab experiment with 15 distinct menus. Each menu contained two, three and four lotteries with three monetary outcomes, and was shown five times. Subjects were not forced to make an active choice at any menu but could avoid/defer doing so at a positive expected cost. Among our 308 subjects from the UK and Germany, significantly more were ordinal- and expected-utility maximizers in their last 15 than in their first 15 identical decision problems. Around a quarter and a fifth of all subjects, respectively, decided in those modes throughout the experiment, with nearly half revealing non-trivial indifferences. A considerable overlap is found between those consistently rational individuals and the ones who satisfied core principles of random utility theory. Finally, choice consistency is positively correlated with cognitive ability, while subjects who learned to maximize utility were more cognitively able than those who did not. We discuss potential implications of our study’s novel set of findings. |
| Keywords: | Ordinal utility; expected utility; learning; indifference; avoidance/deferral; cognitive ability. |
| JEL: | D01 D81 D83 D91 C91 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_687 |
| By: | Kirill Borusyak; Mauricio Caceres Bravo; Peter Hull |
| Abstract: | We develop a new approach to estimating flexible demand models with exogenous supply-side shocks. Our approach avoids conventional assumptions of exogenous product characteristics, putting no restrictions on product entry, despite using instrumental variables that incorporate characteristic variation. The proposed instruments are model-predicted responses of endogenous variables to the exogenous shocks, recentered to avoid bias from endogenous characteristics. We illustrate the approach in a series of Monte Carlo simulations. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.04056 |
| By: | Robert M. Sauer; Noemi Mantovan; Guido Cozzi |
| Abstract: | This paper develops a discrete choice dynamic programming model of women’s career and family decisions that incorporates the joint evolution of both mental and physical health. The framework also models decisions about psychotherapy attendance and cigarette smoking, as well as Bayesian learning about marital match quality. Structural parameters are estimated by the Simulated Method of Moments with Indirect Inference, using data on prime-aged women from the British Household Panel Study. The analysis yields several novel findings: (i) wage returns to mental health exceed those to physical health; (ii) a persistent mental health deficit lowers both lifetime earnings and utility more than an equivalent physical health deficit; and (iii) mental health shocks, match quality uncertainty, and low therapy effectiveness have larger effects on lifetime utility than conventional income- and price-based policies that alter non employment support, childcare costs, or the price of therapy and smoking. |
| Keywords: | Dynamic Discrete Choice, female labor supply, mental health, Bayesian learning, marital match quality, fertility, structural estimation. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cca:wchild:122 |
| By: | Jennifer Alix-García; Christopher R. Knittel |
| Abstract: | Mangroves provide vital ecosystem services like storm surge protection and carbon sequestration, but their coverage is rapidly declining. This study evaluates an environmental education program in the Dominican Republic, targeting children’s attitudes, knowledge, behaviors, and willingness to pay for conservation. The program boosted attitudes, especially in girls, with modest, non-significant behavioral changes. There were also positive spillover effects on peers and parents, with non-treated peers in clubs showing increased mangrove preference and positive attitude shifts in parents. |
| JEL: | C93 I25 Q57 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33675 |