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on Discrete Choice Models |
| By: | Joachim Marti; John Buckell; Johanna Catherine Maclean; Jody L. Sindelar |
| Abstract: | A small but rapidly growing percentage of the U.S. population uses e-cigarettes. Policymakers, especially the FDA, are concerned about their public health impact and thus are contemplating regulations. We provide empirical evidence to inform such policy choices. Specifically, we examine how the demand for e-cigarettes would vary across policy-relevant attributes: 1) health impact, 2) effectiveness in helping smokers quit, 3) bans in public places, and 4) price. We conduct an online discrete choice experiment of 1,669 adult smokers who select among combustible cigarettes and two types of e-cigarettes as attributes are varied. Using a conditional logit model we estimate smokers’ preferences across attributes. Then, using a latent class model, we identify types of smokers and conduct policy simulations separately by these types and for the full sample. In general, smokers value the attributes in the predicted directions and the demand for e-cigarettes tends to be motivated more by smokers’ health concerns than by price or smoking bans. The latent class model identifies three types of smokers, those who prefer combustible cigarettes (‘smokers’), e-cigarettes (‘vapers’), and using both (‘dual users’). We conclude that varying these policy-relevant attributes will have small, significant impacts on average, but with substantial heterogeneity by smoker type. |
| JEL: | C35 I12 I18 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22079&r=dcm |
| By: | Francesco Bogliacino; Cristiano Codagnone; Giuseppe Alessandro Veltri; Francisco Lupiáñez-Villanueva; George Gaskell; Andriy Ivchenko |
| Abstract: | This article presents the results of a laboratory experiment and an online multi-country experiment testing the effect of motor vehicle eco-labels on consumers. The laboratory study featured a discrete choice task and questions on comprehension, while the ten countries online experiment included measures of willingness to pay and comprehension. Labels focusing on fuel economy or running costs are better understood, and influence choice about money-related eco-friendly behaviour. We suggest that this effect comes through mental accounting of fuel economy. In the absence of a cost saving frame, we do not find a similar effect of information on CO2 emissions and eco-friendliness. Labels do not perform as well as promotional materials. Being embedded into a setting, which is designed to capture the attention, the latter are more effective. We found also that large and expensive cars tend to be undervalued once fuel economy is highlighted. |
| Keywords: | eco-label; nudge; willingness to pay; fuel economy; experiments |
| JEL: | C9 D3 Q56 Q58 |
| Date: | 2016–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:col:000178:014330&r=dcm |
| By: | Taiga Saito (Financial Research Center at Financial Services Agency, Government of Japan); Akihiko Takahashi (Graduate School of Economics, The University of Tokyo.); Hiroshi Tsuda (Department of Mathematical Sciences, Doshisha University, Visiting Professor at the Institute of Statistical Mathematics) |
| Abstract: | In this paper, we introduce a model that incorporates features of the fully trans- parent hotel booking systems and enables estimates of hotel choice probabilities in a group based on the room charges. Firstly, we extract necessary information for the estimation from big data of online booking for major four hotels near Kyoto station. 1 Then, we consider a nested logit model as well as a multinomial logit model for the choice behavior of the customers, where the number of rooms available for booking for each hotel are possibly limited. In addition, we apply the model to an optimal room charge problem for a hotel that aims to maximize its expected sales of a certain room type in the transparent online booking systems. We show numerical examples of the maximization problem using the data of the four hotels of November 2012 which is a high season in Kyoto city. This model is useful in that hotel managers as well as hotel investors, such as hotel REITs and hotel funds, are able to predict the potential sales increase of hotels from online booking data and make use of the result as a tool for investment decisions. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cfi:fseres:cf380&r=dcm |
| By: | Weiyi Zhang (Graduate School of Economics, Kobe University); Hiromasa Takahashi (Faculty of International Studies, Hiroshima City University); Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | Much of the literature on performance-related pay has discussed the relationships with risk attitude, job satisfaction, sorting effects, amongst other factors. This paper focuses on the relationship between individual preferences for physical exercise or sports and the tradeoff between fixed and performance-related pay. First, a choice experiment is used to identify the individual preference for payments, and the tradeoff between fixed and performance-related pay. Next, OLS regression models are used to link the tradeoff with individual preference for physical exercise or sports. The results show that such a preference has a positive and significant influence on individuals' tradeoff of payments. For individuals who like physical exercise or sports more, who are better at them, and who take part in them more frequently, are more likely to prefer performance-related pay. |
| Keywords: | Physical exercise, Sports, Fixed pay, Performance-related pay, Tradeoff |
| JEL: | C35 J33 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2016-13&r=dcm |
| By: | Baumgärtner, Stefan; Drupp, Moritz A.; Meya, Jasper N.; Munz, Jan M.; Quaas, Martin F. |
| Abstract: | We study how the distribution of income among members of society, and income inequality in particular, affects social willingness to pay (WTP) for environmental public goods. We find that social WTP for environmental goods increases with mean income, and decreases (increases) with income inequality if and only if environmental goods and manufactured goods are substitutes (complements). Furthermore, social WTP for environmental normally changes more elastically with mean income than with income inequality. We derive adjustment factors for benefit transfer to control for differences in income distributions between a study site and a policy site. For illustration, we quantify how social WTP for environmental public goods depends on the respective income distribution for empirical case studies in Sweden, China and the World. We find that the effects of adjusting for income inequality can be substantial. |
| Keywords: | environmental goods,public goods,income distribution,inequality,willingness to pay,benefit transfer,sustainability policy |
| JEL: | Q51 D63 H23 H43 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201604&r=dcm |
| By: | César Alonso-Borrego (Department of Economics, Universidad Carlos III de Madrid); Raquel Carrasco (Department of Economics, Universidad Carlos III de Madrid) |
| Abstract: | This paper studies the effect on the risk of female victimization of the employment statuses of both partners, conditional on income and a set of sociodemographic characteristics. Using cross-sectional data from the Violence Against Women (VAW) surveys for Spain in 1999, 2002, and 2006, we address the potential endogeneity of employment and income variables using a multivariate probit model. We exploit geographical-level information on employment and unemployment rates by gender and age, and on household income, to identify the parameters of the model. Our estimation results, for which proper account of the endogeneity problem proves critical, show that male partner employment plays a major role in the risk of physical violence, while female employment only lowers the risk of violence when her partner is employed too. The lowest risk of physical abuse appears for more egalitarian couples in which both partners are employed. |
| Keywords: | intimate-partner violence, employment, discrete choice, multivariate probit, endogeneity. |
| JEL: | J12 D19 J16 C25 C26 |
| Date: | 2016–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201607&r=dcm |
| By: | Carrasco, Raquel; Alonso-Borrego, César |
| Abstract: | This paper studies the effect on the risk of female victimization of the employment statuses of both partners, conditional on income and a set of sociodemographic characteristics. Using cross-sectional data from the Violence Against Women (VAW) surveys for Spain in 1999, 2002, and 2006, we address the potential endogeneity of employment and income variables using a multivariate probit model. We exploit geographical-level information on employment and unemployment rates by gender and age, and on household income, to identify the parameters of the model. Our estimation results, for which proper account of the endogeneity problem proves critical, show that male partner employment plays a major role in the risk of physical violence, while female employment only lowers the risk of violence when her partner is employed too. The lowest risk of physical abuse appears for more egalitarian couples in which both partners are employed. |
| Keywords: | Intimate-partner violence; Multivariate probit; Discrete choice; Endogeneity; Employment |
| JEL: | C26 C25 J16 D19 J12 |
| Date: | 2016–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:22575&r=dcm |
| By: | Abay, Kibrom A.; Berhane, Guush; Taffesse, Alemayehu Seyoum; Koru, Bethlehem; Abay, Kibrewossen |
| Abstract: | Agriculture growth in Africa is often characterized by low aggregate levels of technology adoption. Recent evidence, however, points to co-existence of substantial adoption heterogeneities across farm households and a lack of a suitable mix of inputs for farmers to take advantage of input complementarities, thereby limiting the potential for learning towards the use of an optimal mix of inputs. We use a detailed large longitudinal dataset from Ethiopia to understand the significance of input complementarities, unobserved heterogeneities, and dynamic learning behavior of farmers facing multiple agricultural technologies. We introduce a random coefficients multivariate probit model, which enables us to quantify the complementarities between agricultural inputs, while also controlling for alternative forms of unobserved heterogeneity effects. The empirical analysis reveals that, conditional on various types of unobserved heterogeneity effects, technology adoption exhibits strong complementarity (about 70 percent) between chemical fertilizers and improved seeds, and relatively weaker complementarity (between 6 and 23 percent) between these two inputs and extension services. Stronger complementarities are observed between specific extension services (advice on land preparation) and improved seed and chemical fertilizers, as opposed to simple visits by extension agents, suggesting that additional benefits can be gained if the extension system is backed by “knowledge” inputs and not just focus on “nudging” of farmers to use these inputs. The analysis also uncovers substantial unobserved heterogeneity effects, which induce heterogeneous impacts in the effect of the explanatory variables among farmers with similar observable characteristics. We also show that ignoring these behavioral features bears important implications in quantifying the effect of some policy interventions which are meant to facilitate technology adoption. For instance, ignoring these features leads to significant overestimation of the effectiveness of extension services in facilitating technology adoption. We also document strong learning behavior, a process that involves learning-by-doing as well as learning from extension agents. |
| Keywords: | agricultural growth, technology adoption, input complementarity, unobserved heterogeneity, dynamics, random coefficients multivariate probit, maximum simulated likelihood approaches, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:esspwp:82&r=dcm |
| By: | Richard Blundell (University College London); Monica Costa Dias (Institute for Fiscal Studies and CEF-UP at the University of Porto); Costas Meghir (Cowles Foundation, Yale University); Jonathan Shaw (Institute for Fiscal Studies and University College London) |
| Abstract: | We estimate a dynamic model of employment, human capital accumulation - including education, and savings for women in the UK, exploiting tax and benefit reforms, and use it to analyze the effects of welfare policy. We find substantial elasticities for labor supply and particularly for lone mothers. Returns to experience, which are important in determining the longer-term effects of policy, increase with education, but experience mainly accumulates when in full-time employment. Tax credits are welfare improving in the UK and increase lone-mother labor supply, but the employment effects do not extend beyond the period of eligibility. Marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts. |
| Keywords: | Female labor supply, Welfare reform, Tax credits, Education choice, Dynamic discrete choice models, Life cycle models |
| JEL: | H2 H3 J22 J24 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1892r2&r=dcm |