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on Discrete Choice Models |
| By: | Claudio Detotto (Laboratoire Lieux, Identités, eSpaces et Activités (LISA)); Marta Meleddu (University of Sassari and CRENoS); Marco Vannini (University of Sassari and CRENoS) |
| Abstract: | The aim of this paper is to analyse the willingness to pay of art-goers for the protection and preservation of cultural artefacts. To this purpose, a discrete choice experiment approach is employed. The experiment took place in 2011 during a major exhibition dedicated to the artist Costantino Nivola (1911- 1988). His works, especially those based on the novel sand-casting technique, are known worldwide and many of them were produced after he moved from Sardinia (Italy) to the United States (where he lived from 1939 to his death in 1988). Over this period he never cut his ties with his native land. As a result, both the American and the Sardinian culture affect and show up in his works. In this context, the discrete choice experiments allowed us to estimate not only the price that people are prepared to pay for the security of Nivola’s artefacts but also the contribution of non-market components, such as identity, to preserve those objects. Accounting for heterogeneity, the empirical findings show that among visitors there is a substantial willingness to partially cover the cost of preserving the cultural heritage, with significant differences related to the characteristics of the collections considered. |
| Keywords: | Cultural heritage ; Discrete Choice Experiment ; Identity ; Mixed Logit |
| JEL: | C25 D60 D61 Z11 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:lia:wpaper:004&r=dcm |
| By: | John C. Whitehead; Pamela Wicker |
| Abstract: | This study examines the monetary value of intangible benefits to participants of an active sport tourism event. Willingness to travel greater distances for future events is assessed and converted into willingness to pay estimates using travel costs. Using survey data from the 2014 and 2015 Blood Sweat Gears bike race, the intended visitation models show that changes in travel cost have a significant negative effect. Willingness to pay to revisit the event was between 10% and 30% of the registration fee. The likelihood of return visit decreases as travel costs increase, indicating that the willingness to pay estimates can be considered internally valid. The willingness to pay estimates stemming from two years of data collection are stable, suggesting that they are also temporally reliable. This study demonstrated the feasibility of using stated preference intention to revisit questions to assign a monetary value to intangible benefits of active sport tourists. Key Words: active sport tourism; cycling; intention to revisit; monetary valuation; non-market good; temporal reliability; willingness to pay |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:17-03&r=dcm |
| By: | Hyungsik Roger Moon (Institute for Fiscal Studies and USC); Matthew Shum (Institute for Fiscal Studies); Martin Weidner (Institute for Fiscal Studies and cemmap and UCL) |
| Abstract: | We extend the Berry, Levinsohn and Pakes (BLP, 1995) random coeffcients discrete-choice demand model, which underlies much recent empirical work in IO. We add interactive fixed effects in the form of a factor structure on the unobserved product characteristics. The interactive fixed effects can be arbitrarily correlated with the observed product characteristics (including price), which accommodates endogeneity and, at the same time, captures strong persistence in market shares across products and markets. We propose a two-step least squares-minimum distance (LS-MD) procedure to calculate the estimator. Our estimator is easy to compute, and Monte Carlo simulations show that it performs well. We consider an empirical illustration to US automobile demand. |
| Keywords: | discrete-choice demand model, interactive xed e ects, factor analysis, panel data, random utility model. |
| JEL: | C23 C25 |
| Date: | 2017–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:12/17&r=dcm |
| By: | Bell, Andrew R.; Ward, Patrick S.; Ashfaq, Muhammad; Davies, Stephen |
| Abstract: | In the face of increasing environmental stresses, there is a critical need to improve water-use efficiency in many arid and semiarid agroclimatic zones. Drip irrigation is a high-efficiency irrigation technology that can improve water-use efficiency in currently irrigated areas and transform areas that are not otherwise irrigable in practice. Although adoption of drip irrigation is growing rapidly in India, adoption is low in neighboring Pakistan. The authors of this paper undertook a discrete choice experiment framed around the hypothetical subsidized purchase of a drip irrigation system in four districts of Punjab, Pakistan. The nonrepresentative sample of adopters and nonadopters in the study districts identified a clear increase in the valuation of drip systems in the first several years following adoption. This finding suggests that farmers may be unaware of the opportunities for the use of drip irrigation on their farms or the benefits that may accrue from such use. In addition, farmers’ aspirations for cropping systems under drip were better predictors of the valuation of drip systems than were current cropping patterns, implying that a different agricultural landscape might reasonably emerge under improved adoption of drip. Aspirations differed across the different agroecological zones and water regimes captured by this study. Aspirations to substitute wheat crops for fruits and vegetables were associated with a higher appreciation of the subsidy level, whereas aspirations to expand wheat were associated with a higher appreciation of the area covered by the drip initiative; together, these findings imply a degree of control over the extent of wheat production in the landscape via careful design of the drip subsidy program. Although the penetration of drip irrigation is not yet sufficient to draw inferences from a representative sample, these results suggest a number of ways in which drip irrigation may transform Pakistan’s agricultural landscape |
| Keywords: | trickle irrigation; irrigation systems; experimentation; water supply; water use efficiency, choice experiment; Punjab Irrigated-agriculture Productivity Improvement Project (PIPIP); drip irrigation, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1636&r=dcm |
| By: | Hyeongwoo Kim; Wen Shi |
| Abstract: | This paper empirically investigates the determinants of the two key benchmark interest rates in China using an array of constrained ordered probit models for quarterly frequency data from 1987 to 2013. Specifically, we estimate the behavioral equation of the People's Bank of China that models its decision-making process for revisions of the benchmark deposit rate and the lending rate. Our findings imply that the PBC's policy decisions are better understood as responses to changes in inflation and money growth, while output gaps and the exchange rate play negligible roles. We also implement in-sample fit analyses and out-of-sample forecast exercises. Our empirical findings show robust and reasonably good performances of our models in understanding dynamics of these benchmark interest rates. |
| Keywords: | Monetary Policy; People's Bank of China; Ordered Probit Model; Deposit Rate; Lending Rate; In-Sample Fit; Out-of-Sample Forecast |
| JEL: | E52 E58 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2017-04&r=dcm |
| By: | Boneva, L.; Linton, O. |
| Abstract: | What is the effect of funding costs on the conditional probability of issuing a corporate bond? We study this question in a novel dataset covering 5610 issuances by US firms over the period from 1990 to 2014. Identification of this effect is complicated because of unobserved, common shocks such as the global financial crisis. To account for these shocks, we extend the common correlated effects estimator to settings where outcomes are discrete. Both the asymptotic properties and the small sample behavior of this estimator are documented. We find that for non-financial firms, yields are negatively related to bond issuance but that effect is larger in the pre-crisis period. |
| Keywords: | Heterogeneous panel data, discrete choice models, capital structure |
| JEL: | C23 C25 G32 |
| Date: | 2017–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1703&r=dcm |
| By: | Andrew Chesher (Institute for Fiscal Studies and University College London); Adam Rosen (Institute for Fiscal Studies and Duke University) |
| Abstract: | This paper develops characterizations of identifi?ed sets of structures and structural features for complete and incomplete models involving continuous or discrete variables. Multiple values of unobserved variables can be associated with particular combinations of observed variables. This can arise when there are multiple sources of heterogeneity, censored or discrete endogenous variables, or inequality restrictions on functions of observed and unobserved variables. The models generalize the class of incomplete instrumental variable (IV) models in which unobserved variables are single-valued functions of observed variables. Thus the models are referred to as Generalized IV (GIV) models, but there are important cases in which instrumental variable restrictions play no signifi?cant role. Building on a de?finition of observational equivalence for incomplete models the development uses results from random set theory which guarantee that the characterizations deliver sharp bounds, thereby dispensing with the need for case-by-case proofs of sharpness. The use of random sets de?ned on the space of unobserved variables allows identi?cation analysis under mean and quantile independence restrictions on the distributions of unobserved variables conditional on exogenous variables as well as under a full independence restriction. The results are used to develop sharp bounds on the distribution of valuations in an incomplete model of English auctions, improving on the pointwise bounds available till now. Application of many of the results of the paper requires no familiarity with random set theory. |
| Keywords: | instrumental variables, endogeneity, excess heterogeneity, limited information, par- tial identfii?cation, random sets, incomplete models, English auctions. |
| JEL: | C10 C14 C24 C26 |
| Date: | 2016–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:44/16&r=dcm |
| By: | Bryan S. Graham (Institute for Fiscal Studies and University of California, Berkeley) |
| Abstract: | I introduce a model of undirected dyadic link formation which allows for assortative matching on observed agent characteristics (homophily) as well as unrestricted agent level heterogeneity in link surplus (degree heterogeneity). Like in fixed effects panel data analyses, the joint distribution of observed and unobserved agent-level characteristics is left unrestricted. Two estimators for the (common) homophily parameter, ß0 , are developed and their properties studied under an asymptotic sequence involving a single network growing large. The first, tetrad logit (TL), estimator conditions on a sufficient statistic for the degree heterogeneity. The second, joint maximum likelihood (JML), estimator treats the degree heterogeneity {Ai0}Ni=1 as additional (incidental) parameters to be estimated. The TL estimate is consistent under both sparse and dense graph sequences, whereas consistency of the JML estimate is shown only under dense graph sequences. Supplement for CWP 08/17 |
| Keywords: | Network formation, homophily, degree heterogeneity, scale-free networks, incidental parameters, asymptotic bias, fixed effects, conditional likelihood, dependent U-Process |
| JEL: | C31 C33 C35 |
| Date: | 2017–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:08/17&r=dcm |
| By: | Christopher Boyce (University of Stirling, Stirling Management School); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Nick Hanley (University of St Andrews, School of Geography and Geosciences) |
| Abstract: | In this paper, we undertake the first examination of the effects of personality on individual economic choices over public environmental goods, using a stated preference approach. Based on three data sets from three separate choice modelling studies, we examine the effects of personality on preferences for the status quo, for changes in environmental quality, and over the costs of investing in environmental improvement. Using a hybrid choice framework, we show that incorporating personality research into economic models can provide valuable behavioural insights, enriching explanations of why the demand for environmental goods varies across people. |
| Keywords: | personality, preference heterogeneity, hybrid choice models, stated preferences, choice models |
| JEL: | C35 D03 D12 D61 Q25 Q51 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2017-11&r=dcm |
| By: | Olivier Damette; Philippe Delacote; Gaye del Lo |
| Abstract: | The paper investigates the factors influencing households’ energy choices, and the drivers of switching toward cleaner energy. We first present a theoretical framework to determine the factors that explain households’ energy consumption and highlight the motivations underlying their transition towards less polluting sources, including their environmental preference. Using French household data from ADEME, we provide an econometric test of qualitative variables following studies by Dubin and McFadden (1984). Our results show that income and prices are the main determinants of household energy consumption. Environmental considerations seem to influence the choice of energy sources more than consumption. We also find evidence that income and relative capital costs are the most important variables for household energy switching. |
| Keywords: | Energy choice, Switching, Environmental preference, Discrete and continuous model. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1702&r=dcm |