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on Discrete Choice Models |
| By: | Hernan Bajerano (Center for Economic Research and Teaching (CIDE) and Economic Science Institute, Chapman University); Matias Busso (Inter-American Development Bank); Juan Francisco Santos (Inter-American Development Bank) |
| Abstract: | We study how individuals in six Latin American countries value public versus private provision of education and healthcare using a survey experiment. Respondents were randomly assigned to vignettes that vary income, service quality, and provider type. Reported service quality is the main driver of choices: the probability of selecting a private provider roughly doubles when reported quality of the public option falls from 80 to 20 percent, while income has a smaller effect. Higher institutional trust lowers the likelihood of switching to private providers but does not affect willingness to pay once individuals choose private provision. |
| Keywords: | Stated preferences; Willingness to pay; Public versus private provision; Service quality; Latin America |
| JEL: | D12 H42 I21 I18 O54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:26-01 |
| By: | John List |
| Abstract: | List Experiments are widely used across the social sciences to measure sensitive attitudes and behaviors, yet no prior study has validated their estimates against an incentive-compatible behavioral measure. I conduct a field experiment with 400 subjects at a sports card show, combining List Experiment treatments for willingness to pay, one for wolf reintroduction in Yellowstone Park, one for a graded sports card, with a Vickrey second-price auction that provides a real-money benchmark. The List Experiment estimates 26% would pay $50 for the card, compared to 22% who bid at least that amount in the auction; this difference is not statistically significant. These results provide the first criterion validity test of a List Experiment and suggest the method holds promise as a parsimonious alternative to conventional stated preference approaches in settings where survey space constraints preclude standard bias-mitigation interventions. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:feb:framed:00830 |
| By: | Christopher Kops; Paola Manzini; Marco Mariotti; Illia Pasichnichenko |
| Abstract: | We study identification in models of aggregate choice generated by unobserved behavioral types. An analyst observes only aggregate choice behavior, while the populationmdistribution of types and their type-level choice patterns are latent. Assuming only minimal and purely qualitative prior knowledge of the process generating type-level choice probabilities, we characterize necessary and sufficient conditions for identifiability. Identification obtains if and only if the data exhibit sufficient cross-type behavioral heterogeneity, which we characterize equivalently through combinatorial matching conditions between types and alternatives, and through algebraic properties of the matrices mapping type-level to aggregate choice behavior. |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:26/820 |
| By: | Claire Greene; Oz Shy; Joanna Stavins |
| Abstract: | This paper investigates the degree to which merchants influence consumers' choice of how they pay for transactions. Using data from the Survey and Diary of Consumer Payments Choice, we examine consumers' adherence to their preferred payment method when making in-person transactions. We also investigate whether merchants are able to steer consumers away from their preferred payment method. We characterize preferences for paying with cash or cards according to consumers' income, level of education, and employment status. We find that consumers make most payments with their preferred method. When consumers pay with a nonpreferred method, it is due only in small part to merchants' refusal to accept that payment method. If a merchant accepts card payments, consumers who prefer paying with cards are not likely to pay with cash for large-value transactions or for gas or groceries. Discounts on cash purchases do not affect the probability of consumers deviating from using cards and paying with cash. Finally, the paper identifies “inertia” effects, which lead consumers to use the same payment method for consecutive purchases. |
| Keywords: | consumer payments; consumer payment preferences; merchant steering; discounts; surcharges |
| JEL: | E42 |
| Date: | 2026–02–17 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedawp:102535 |
| By: | M, Dhasarathan; Sen, Biswajit; Mandal, Subhasis; Singh, Ajmer |
| Abstract: | In today’s consumer market, individuals are subject to various stimuli such as advertising campaigns, popular magazines etc., which shape their marginal consumption propensity. However, as Economic Theory teaches us, this propensity does not necessarily translate into consumer spending. This is strongly affected by consumers’ eating habits, individual circumstances and other contextual variables. This study, conducted in the Tamil Nadu state of India explores the consumer preferences and factors moderating the consumption of functional dairy foods (FDFs) based on the data collected from 160 respondents chosen from different sale locations. Socioeconomic profiles were analyzed using tabular and frequency analysis, while indices were constructed to assess consumer preferences using Likert scale. The Seemingly Unrelated Regression model was employed to identify factors moderating functional dairy food consumption. The findings highlight that safety/trustworthiness was the most valued attribute among consumers, followed closely by nutritional and health benefits. Despite being in the early stages of adoption, functional dairy foods, particularly fortified milk, demonstrate significant growth potential. Key determinants of consumption include family income, occupation, dietary habits, family size and geographic location. |
| Keywords: | Functional dairy foods, Seemingly Unrelated Regression model, Probiotic foods, Fortified foods, Consumer preferences |
| JEL: | I1 Q1 |
| Date: | 2025–10–23 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127237 |
| By: | Wu, Hangjian; Mentzakis, Emmanouil; Schaafsma, Marije |
| Abstract: | Air pollution is a globally recognised problem that causes premature deaths and economic loss. 95% of these premature deaths occur in developing countries, which often trade off investing in air quality improvement against economic growth. In these countries, economic growth may be prioritised by governments due to resource constraints, causing citizens to experience future air quality deterioration. Evidence from studies in developed countries suggests that social capital can be a potential impactful mediator urging the government to implement more pro-environmental policies. However, little empirical evidence exists for developing countries where environmental governance is often complicated by competing policy priorities. We investigated residents' preferences for clean air in Beijing, China, using a discrete choice experiment. In the experiment, attributes of air pollution were specified as either an improvement or a deterioration as a result of policy prioritisation. The effects of social capital (consisting of social trust, norms and networks) were examined by incorporating social capital indicators into a novel hybrid choice model. The results suggest that social capital was positively associated with individual preferences when air quality was projected to be improved (i.e., higher social capital leads to higher preferences for air quality improvement) as well as deteriorated (i.e., higher social capital leads to higher resistance to air quality deterioration). Our findings imply that in a society with high social capital, policymakers who prioritise economic growth at the expense of the environment are likely to cause considerable public welfare losses. |
| Keywords: | Air quality, discrete choice experiment, social capital, social trust, social norms, social networks |
| JEL: | D6 Q51 Q53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iedlwp:336688 |
| By: | Daniele Caliari; Valentino Dardanoni; Carla Guerriero; Paola Manzini; Marco Mariotti |
| Abstract: | We study experimentally how children’s ability to avoid choice errors develops over time, focusing on both riskless and risky decisions among primary school children. We identify four types of rationality violations: cycles and menu effects in the riskless domain; and dominance and framing effects compatible with correlation neglect in the risky domain. We find that types of violations are correlated within domains but broadly independent across domains. To interpret our results we build and estimate a structural model of limited consideration. We identify an index of error avoidance and study how it develops with age and socioeconomic background, providing a new tool to understand the development of choice errors. |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:26/821 |
| By: | Christopher Kops; Elias Tsakas |
| Abstract: | This paper proposes a model of choice via agentic artificial intelligence (AI). A key feature is that the AI may misinterpret a menu before recommending what to choose. A single acyclicity condition guarantees that there is a monotonic interpretation and a strict preference relation that together rationalize the AI's recommendations. Since this preference is in general not unique, there is no safeguard against it misaligning with that of a decision maker. What enables the verification of such AI alignment is interpretations satisfying double monotonicity. Indeed, double monotonicity ensures full identifiability and internal consistency. But, an additional idempotence property is required to guarantee that recommendations are fully rational and remain grounded within the original feasible set. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.04526 |
| By: | Ruofeng Rao |
| Abstract: | Structural Equation Modeling (SEM) systematically validated hierarchical pathways among multiple factors by constructing a dual framework integrating latent variable measurement and path analysis, utilizing covariance matrices derived from online questionnaires of Wuliangye consumers in Sichuan Province. Statistical analysis quantified path coefficient significance through maximum likelihood estimation, revealing via factor loadings and goodness-of-fit tests that consumer ethnocentrism directly promotes purchase intention, while simultaneously refuting the null hypothesis regarding perceived behavioral control-thus deconstructing the "trigger-transmission" causal chain among variables. Crucially, SEM findings revealed environmental stimuli as the predominant factor, indirectly influencing purchasing behavior through perceived value, contrary to existing literature asserting equal impacts from consumer ethnocentrism, environmental stimuli, and perceived behavioral control. Statistical evidence further demonstrated higher online purchase frequency for premium Wuliangye liquor, aligning with Generation Z's e-commerce preferences. By implementing stricter website-based participant screening than prior studies, this research optimized the analytical model, yielding data-driven strategic recommendations: strengthening e-commerce platforms, enhancing promotional expertise, leveraging cultural localization, and prioritizing premium product development. These actionable insights significantly advance sales optimization strategies for Wuliangye products in Sichuan's dynamic market. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.02956 |
| By: | Lieberman, Offer; Matyas, Laszlo |
| Abstract: | The paper proposes two different estimation procedures for nonlinear panel data models with a general parametric heterogeneity distribution. Using small—sigma and the Laplace approximation, easily computable analytical solutions to the marginal likelihood are presented. |
| Keywords: | Research Methods/Statistical Methods |
| URL: | https://d.repec.org/n?u=RePEc:ags:monebs:267632 |
| By: | Ying Chen; Paul Cheshire; You-Sin Wang; Xiangqing Wang |
| Abstract: | We study how technological innovation has transformed the valuation of consumption services, using the sudden national expansion of food delivery services (FDS) in China as a natural experiment. Using a Bartik-style instrumental variable strategy that interacts national FDS growth with pre-existing restaurant density, we estimate the capitalization of delivery-accessible restaurants into Beijing housing prices. An additional 100 delivery-accessible restaurants raise housing prices by approximately 3 percent. Effects are strongest near the city center, declining by 0.15 percentage points per kilometer from the CBD, consistent with higher adoption rates and time valuations among central residents. Beyond quantity, households also value cuisine diversity. Unlike ride-sharing platforms, which reduce commuting costs and flatten the urban rent gradient, FDS unpacked the food and menu choice element of the restaurant experience, allowing this to be traded as a separate service. By reducing travel costs for consumption rather than commuting, FDS amplifies existing urban price gradients, disproportionately benefits central residents and demonstrates the continuing importance of consumption services in delivering differential welfare in cities. |
| Keywords: | food delivery services, housing markets, urban amenities, platform technology, China |
| Date: | 2026–02–13 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2151 |
| By: | Blanchard, Pierre; Matyas, Laszlo |
| Abstract: | In this paper we analyse systematically through Monte Carlo simulations the consequences of misspecified heterogeneity on the most popular linear panel data models. We also illustrate our findings, through the estimation of a well known investment demand model. |
| Keywords: | Research Methods/Statistical Methods |
| URL: | https://d.repec.org/n?u=RePEc:ags:monebs:267763 |
| By: | Ayden Higgins (University of Exeter Business School - University of Exeter); Koen Jochmans (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse) |
| Abstract: | We present a constructive proof of (nonparametric) identication of the parameters of a bivariate Markov chain when only one of the two random variables is observable. This setup generalizes the hidden Markov model in various useful directions, allowing for state dependence in the observables and allowing the transition kernel of the hidden Markov chain to depend on past observables. We give conditions under which the transition kernel and the distribution of the initial condition are both identied (up to a permutation of the latent states) from the joint distribution of four (or more) time-series observations. |
| Keywords: | dynamic discrete choice, finite mixture, Markov process, regime switching, state dependence |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05488665 |
| By: | Tiancheng Wang; Krishna Sharma |
| Abstract: | We develop an iterative framework for economic measurement that leverages large language models to extract measurement structure directly from survey instruments. The approach maps survey items to a sparse distribution over latent constructs through what we term a soft mapping, aggregates harmonized responses into respondent level sub dimension scores, and disciplines the resulting taxonomy through out of sample incremental validity tests and discriminant validity diagnostics. The framework explicitly integrates iteration into the measurement construction process. Overlap and redundancy diagnostics trigger targeted taxonomy refinement and constrained remapping, ensuring that added measurement flexibility is retained only when it delivers stable out of sample performance gains. Applied to a large scale public employee retirement plan survey, the framework identifies which semantic components contain behavioral signal and clarifies the economic mechanisms, such as beliefs versus constraints, that matter for retirement choices. The methodology provides a portable measurement audit of survey instruments that can guide both empirical analysis and survey design. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.02604 |