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on Discrete Choice Models |
| By: | Petrolia, Daniel; Interis, Matthew; Hwang, Joonghyun |
| Abstract: | This paper presents what we believe to be the most comprehensive suite of comparison criteria regarding multinomial discrete-choice experiment elicitation formats to date. We administer a choice experiment focused on ecosystem-service valuation to three independent samples: single-choice, repeated-choice, and best-worst elicitation. We test whether results differ by parameter estimates, scale factors, preference heterogeneity, status-quo/action bias, attribute non-attendance, and magnitude and precision of welfare measures. Overall, we find very limited evidence of differences in attribute parameter estimates, scale factors, and attribute increment values across elicitation treatments. However, we find significant differences in status-quo/action bias across elicitation treatments, with repeated-choice resulting in greater proportions of “Yes” votes, and consequently, higher program-level welfare estimates. Also, we find that single-choice yields drastically less-precise welfare estimates. Finally, we find significant differences in attribute non-attendance behavior across elicitation formats, although there appears to be little consistency in class shares even within a given elicitation treatment. |
| Keywords: | best-worst elicitation, choice experiment, contingent valuation, ecosystem-service valuation, stated preference, survey, willingness to pay, Environmental Economics and Policy, Q51, Q57, |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:misswp:212479&r=dcm |
| By: | Fedor Iskhakov (ARC Centre of Excellence in Population Ageing Research, University New South Wales); Thomas Høgholm Jørgensen (Department of Economics, University of Copenhagen); John Rust (Department of Economics, Georgetown University); Bertel Schjerning (Department of Economics, University of Copenhagen) |
| Abstract: | We present a fast and accurate computational method for solving and estimating a class of dynamic programming models with discrete and continuous choice variables. The solution method we develop for structural estimation extends the endogenous gridpoint method (EGM) to discrete-continuous (DC) problems. Discrete choices can lead to kinks in the value functions and discontinuities in the optimal policy rules, greatly complicating the solution of the model. We show how these problems are ameliorated in the presence of additive choice-specic IID extreme value taste shocks. We present Monte Carlo experiments that demonstrate the reliability and eciency of the DC-EGM and the associated Maximum Likelihood estimator for structural estimation of a life cycle model of consumption with discrete retirement decisions. |
| Keywords: | Structural estimation, lifecycle model, discrete and continuous choice, retirement choice, endogenous gridpoint method, nested xed point algorithm, extreme value taste shocks, smoothed max function. |
| JEL: | C13 C63 D91 |
| Date: | 2015–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1519&r=dcm |
| By: | Krah, Kwabena; Petrolia, Daniel; Williams, Angelica; Coble, Keith; Harri, Ardian; Rejesus, Roderick |
| Abstract: | This study employs a stated choice experiment to identify producer preferences for contracts to produce a risky bioenergy crop. The study develops a theoretical framework that takes into account subjective risk preference and perception information while also accounting for heterogeneous status-quo (i.e., current crop) alternatives. Results from our Random Parameter Logit model indicate that price, biorefinery harvest, and establishment cost-share all had significant positive effects on the probability of a producer accepting a contract, whereas contract length have a negative effect. The study also finds evidence of significant preference heterogeneity in producer preferences for biorefinery harvest, yield insurance, and contract length. Incorporating subjective risk perception and risk preference information, as well as accounting for heterogeneous status-quo alternatives in the decision framework improves overall model performance. |
| Keywords: | choice experiment, contract, mean-variance utility, preference heterogeneity, random parameters logit, risk perceptions, risk preferences, willingness to accept compensation, Crop Production/Industries, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q42, Q51, |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:misswp:212483&r=dcm |
| By: | Petrolia, Daniel; Walton, William; Yehouenou, Lauriane |
| Abstract: | We administered an online choice experiment to a sample of U.S. raw oyster consumers to identify factors influencing preferences for Gulf of Mexico oysters, and to estimate willingness-to-pay for specific attributes, including harvest location / brand, price, size, taste (saltiness), and cultivation method (wild vs. farm-raised). This work was complemented by taste panels conducted in Point Clear (Alabama), Houston, and Chicago. During taste panels, local branded varieties dominate consumer choice, although these same varieties fare no better than other varieties under blind taste-tests. Online survey results indicate that Non-Gulf respondents are likely to require a price discount on Gulf varieties relative to local varieties, on the order of $3-9 per half-dozen, depending on the specific variety and other factors. Although most Gulf respondents chose the cheaper generic Gulf oyster over branded Gulf varieties, we still estimate positive price premia for branded Gulf varieties of up to $5 per half-dozen. |
| Keywords: | branding, choice experiment, consumer preferences, economics, labeling, survey, willingness to pay, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing, D12, Q22, |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:misswp:212482&r=dcm |
| By: | Maltz, Amnon (Department of Economics, University of Haifa) |
| Abstract: | We use the revealed preference method to derive a model of dynamic choice where the agent’s past experience may influence her current decisions. Our model generalizes the classical individual choice model which is rationalized by utility maximization, and reduces to that model in the absence of experience. As the agent gains experience her utility changes but only in a very restricted fashion. Every period, after an alternative is chosen, the utility of that, and only that alternative, may change while the utility of all other alternatives remains fixed. The model provides a platform on which many behavioral dynamic phenomena may be examined. We utilize it and look into the behavioral implications of bounded memory, status quo bias and variety seeking. |
| Keywords: | Experience, Dynamic Choice, Memory, Status Quo Bias, Revealed Preference |
| JEL: | D11 D83 |
| Date: | 2015–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:haf:huedwp:wp201506&r=dcm |