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on Discrete Choice Models |
| By: | Kaur, S.; Pollitt, M. G. |
| Abstract: | The policy of free electricity since 1997 is hugely popular with farmers in Punjab who are its biggest beneficiaries. Successive Governments have either lacked the courage or willingness to pursue market oriented electricity sector reforms even though the adverse con-sequences are increasingly visible. Over the past few decades, experts have expressed concern over the rapidly receding level of the water table and forecast of desertification, as well as the financial burden on the electricity distribution utility and government. Withdrawing free electricity and charging a price for electricity is a huge challenge. This research aims to estimate willingness to pay (WTP) for electricity and consider preferences for an annual free electricity limit with reward for meter installation and a novel incentive-penalty scheme designed to reward low consumption and discourage over-consumption. A discrete choice experiment assuming random probit and multinomial logit choice behaviour model is deployed to estimate the model parameters. We find that more than 82% of respondents are willing to accept an entitlement to a free electricity limit – with a reward for consuming less than this – rather than the current policy of free and unmetered electricity. We also find that the WTP for electricity increases with higher entitlements. Considering the WTP alone, the results suggest that increasing the electricity price can be acceptable to farmers. Further research is needed to develop a pricing strategy that considers the inter-relatedness between electricity entitlement, saving incentive and price. |
| Keywords: | Agriculture, energy water nexus, entitlement, incentive, groundwater, irrigation, electricity consumption, paddy, subsidy, electricity pricing, discrete choice, Punjab |
| JEL: | O13 Q1 Q4 Q5 Q12 Q24 Q25 Q28 Q48 Q57 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2434&r= |
| By: | Kaur, S.; Pollitt, M. G. |
| Abstract: | Stabilization of prices has been an important element of achieving food price stability in most countries — both developing and developed, including India. In this paper, we rethink the ex-tension of the price stabilization as a compensation strategy to stimulate change in favour of low-water crops in Punjab. Groundwater facilitated impressive agricultural production, particularly record increases in wheat and rice productivity in Punjab, but also accelerated depletion of aquifers. Free electricity and negligible pumping costs aggravated the problem and the resultant policy failure encouraged unregulated use of groundwater, lower relative profitability of water efficient crops and a shift in favour of water intensive crops. Questions are now being raised about the sustainability of this intensive agriculture strategy. The rapidly depleting water table level and soil deterioration from overuse of fertilizers and pesticides are attributed to farmers’ preference for high-water rice variety. Drawing from the Payment for Ecosystem Services scheme, this stated preference experiment investigates farmers’ preferences to change high-water rice variety by low-water variety with compensatory payments. Results show that majority of farmers are willing to accept compensation for substitution by low-water intensive rice variety. In addition, the scheme can be accompanied by significant willingness to pay for electricity, but the WTP is contingent upon the nature of electricity charge. |
| Keywords: | Agriculture, energy water nexus, electricity, discrete choice, Punjab, India |
| JEL: | O13 Q1 Q4 Q5 Q12 Q24 Q25 Q28 Q48 Q57 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2433&r= |
| By: | Díaz Escobar, Ana María; Salas Bahamón, Luz Magdalena; Piras, Claudia; Suaya, Agustina |
| Abstract: | This study sheds light on the growing trend and gender dynamics of workplace flexibility in Latin America, underscoring the importance of remote work options in the regions labor market. We explore gender differences in willingness to pay (WTP) for remote work arrangements in Latin America, using a discrete choice experiment across five countries: Colombia, Peru, Mexico, Chile, and Argentina. Results reveals a general trend among Latin American workers to trade off some wage in exchange for more remote work options, both fully and partially remote, in two male-dominated occupations: Manufacturing and information technology. On average, participants agreed to sacrifice around 10% of their wage for hybrid jobs (80% remote, 20% on-site). The WTP for fully remote work was slightly lower, at about 6% of the wage. Women exhibit a higher WTP for flexibility compared to men, with a 62.5% higher willingness across estimates for hybrid arrangements. Moreover, women's inclination towards fully remote options was distinct, as they showed a positive WTP (up to 10% of their salary) for such arrangements, whereas men exhibited no willingness to reduce their wages for fully remote roles. |
| Keywords: | willingness to pay;Flexible Work Arrangements;Discrete Choice Experiment. |
| JEL: | J22 J31 J41 J51 J71 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13439&r= |
| By: | Kaur, S.; Pollitt, M. G. |
| Abstract: | Diesel and electric pumps have dominated groundwater irrigation in Punjab since the advent of intensive agriculture in 1966. National policies offer a range of subsidies for solar pumps, but there is limited empirical evidence of their effectiveness in promoting adoption. To address this need, a discrete choice method is applied to estimate the level of financial incentives for solar pumps preferred by farmers. The results show that enhanced subsidies combined with energy buyback have a significant impact on adoption decisions. The impact of contextual factors on the acceptance of grid-connected solar pumps is also estimated. Additionally, willingness to pay estimates and economic evaluations are improved with the use of flexible mixed logit formulation. The findings confirm that low subsidy limits the diffusion of solar pumps in Punjab agriculture. Further, the results from the statistical models indicate high public acceptance of individual solar agriculture pumps. We suggest that solar subsidies combined with grid purchases of surplus solar electricity can both reduce emissions and reduce the over-use of ground water, by indirectly introducing a price of electricity for water pumping. |
| Keywords: | Renewable energy, solar pumps, feeder level solarization, energy water nexus, energy subsidies, irrigation water, electricity, groundwater depletion, Punjab |
| JEL: | Q1 Q20 Q25 Q42 Q58 O13 O38 P48 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2435&r= |
| By: | Xavier D'Haultfoeuille (CREST) |
| Date: | 2023–11–09 |
| URL: | https://d.repec.org/n?u=RePEc:boc:econ23:03&r= |
| By: | Junyi Shen (Research Institute of Economics and Business Administration, Kobe University, JAPAN and School of Economics, Shanghai University, CHINA); Ken-Ichi Shimomura (College of Asia Pacific Studies, Ritsumeikan Asia Pacific University and Research Institute of Economics and Business Administration, Kobe University, JAPAN) |
| Abstract: | The population decline associated with Japan's declining birth rate will have many effects on the Japanese economy and society. Currently, the Japanese government plans to implement a series of childbirth support measures to increase the birth rate. In this study, we conduct a stated-choice experiment using an online questionnaire survey to elicit Japanese women's preferences for childbirth support measures such as childbirth lump-sum payment, child medical expenses subsidy, common supermarket discount card issued after childbirth, childcare fee exemption, preferential housing treatment, children's education expense subsidy, and childcare leave periods for couples. Most of these measures were found to significantly affect respondents' preferences in the full-sample estimation. Meanwhile, individuals' heterogeneities in preferences for childbirth support measures were also observed using different subsamples based on respondents' age, number of children, overall education level, employment status, and annual household income. |
| Keywords: | Childbirth support measures; Preference; Stated-choice experiment; Conditional Logit; Japan |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2024-19&r= |
| By: | Takahiro ITO (Graduate School of International Cooperation Studies, Kobe University) |
| Abstract: | This paper formulates a novel distribution-free maximum likelihood estimator for binary and ordered response models and demonstrates its finite sample performance in a Monte Carlo simulation. The simulation examines an ordered response model, focusing on estimating the effect of an exogenous regressor (e.g., randomly assigned treatment status) on the choice probability for an ordered outcome. Estimations are implemented based on a binary specification, which converts the outcome to dichotomous values {0, 1}, or an ordinal specification, which uses the outcome as is. The simulation results show that the proposed estimator outperforms conventional parametric/semiparametric estimators in most cases for both specifications. The results also show that the superiority of the proposed estimator holds even in the presence of conditionally heteroscedastic variance. In addition, the estimates based on the ordinal specification are always superior to those based on the binary specification in all simulation designs, implying that converting ordered responses to dichotomous responses and estimating based on the binary specification may not be the optimal approach. |
| Keywords: | semiparametric estimation, distribution-free maximum likelihood, binary choice model, ordered response model, Likert-type data, heteroscedastic variance |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:kcs:wpaper:42&r= |
| By: | Bauer, Michal; Chytilová, Julie; Miguel, Edward |
| Keywords: | experiment, preference measurement, survey, validation |
| Date: | 2024–06–21 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:econwp:qt6cz1s9mp&r= |
| By: | Bensch, Gunther; Grimm, Michael |
| Abstract: | Energy-efficient biomass cookstoves and small solar systems play a vital role in the transition to clean energy. Despite their affordability and scalability, their uptake remains low among households in sub-Saharan Africa. This paper examines the potential contribution of individual-specific behavioural factors to the under-adoption of these technologies. Drawing on data from real-purchase offers in rural Rwanda and Senegal, the analysis focuses on how the willingness to pay for the technologies varies with behavioural constraints including risk aversion, innovation resistance, time preferences, and beliefs. Our results confirm that these factors carry relevant variation that helps understanding the purchase decision process. These findings contribute to a better comprehension of consumer adoption behaviour of innovative consumer goods at the base of the pyramid, providing valuable insights for suppliers entering these markets and informing policy interventions aimed at facilitating households' transition to clean energy. |
| Abstract: | Energieeffiziente Biomasse-Kochherde und Kleinsolarsysteme sind entscheidende Übergangstechnologien bei der Umstellung auf saubere Energieträger. Obwohl sie erschwinglich und skalierbar sind, sind sie in ländlichen Gegenden Afrikas südlich der Sahara nach wie wenig verbreitet. In diesem Beitrag wird untersucht, inwieweit individualspezifische Verhaltensfaktoren zur geringen Verbreitung dieser Technologien beitragen. Auf der Grundlage von Daten aus realen Kaufangeboten im ländlichen Ruanda und Senegal konzentriert sich die Analyse darauf, wie die Bereitschaft, für die Technologien zu zahlen, mit Faktoren wie Risikoaversion, Innovationsresistenz, Zeitpräferenzen und Überzeugungen variiert. Unsere Ergebnisse bestätigen, dass diese Faktoren zum Verständnis des Kaufentscheidungsprozesses beitragen. Diese Ergebnisse liefern ein besseres Verständnis des Kaufverhaltens von armen Verbrauchern im Hinblick auf innovative Konsumgüter bei. Sie liefern wertvolle Erkenntnisse für Anbieter, die diese Märkte erschließen, und liefern Informationen für Politikmaßnahmen, die darauf abzielen, den Übergang von Haushalten zu sauberer Energie zu erleichtern. |
| Keywords: | Base of the pyramid, energy transition, willingness to pay, household decision, behaviour |
| JEL: | D12 O12 O13 O33 Q41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:298848&r= |
| By: | Gambato, Jacopo |
| Abstract: | I analyze a model of directed search in which a consumer inspects a finite number of products sharing attributes with each others. The consumer discovers her valuation for the attributes of the inspected products and adapts her search strategy based on what she has learned. The consumer anticipates the optimal paths that arise after different realizations; this generates a search rule that accounts for learning systematically. In this search environment, a multiproduct seller commits to a menu of horizontally differentiated products. The seller can exploit the fact that the emerging search paths reveal the consumer's preferences: by setting different prices for ex ante identical products, the seller can encourage specific paths to arise and exploit the information that the consumer learned through search. In some cases, the seller optimally limits the set of available products. |
| Keywords: | consumer search, directed search, learning, multiproduct monopoly, pricing, product portfolio |
| JEL: | D42 D83 L12 L15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300012&r= |