nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒11‒26
seven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre
  1. There are reasons researchers may be interested in accounting for spatial heterogeneity of preferences, including avoiding model misspecification and the resulting bias, and deriving spatial maps of willingness-to-pay (WTP), which are relevant for policy-making and environmental management. We employ a Monte Carlo simulation of three econometric approaches to parametrically account for spatial auto-correlation in discrete choice models. The first is based on the analysis of individual-specific estimates of the mixed logit model. The second extends this model to explicitly account for spatial correlation, instead of simply conditioning individual-specific estimates on population-level distributions and individuals’ choices. The third is the geographically weighted multinomial logit model, which incorporates spatial dimensions using geographical weights to estimate location-specific choice models. We analyze the performance of these methods in recovering population-, region- and individual-level preference parameter estimates and implied WTP in the case of spatial autocorrelation. We find that, although ignoring spatial autocorrelation did not significantly bias population-level results of the simple mixed logit model, neither individual-specific estimates nor the geographically weighted multinomial logit model was able to reliably recover the true region- and individual-specific parameters. We show that the spatially-autocorrelated mixed logit proposed in this study is promising and outline possibilities for future development. By Wiktor Budziński; Mikołaj Czajkowski
  2. Designing capacity development activities of small-scale farmers in developing countries based on discrete choice experiments By Landmann, D.; Feil, J.-H.; Lagerkvist, C.J.; Otter, V.
  3. Carbon neutral global value chains: demand or desire? - Consumers willingness to pay for a carbon neutrality label on specialty coffee in Germany By Birkenberg, A.
  4. Indirect questioning as a debiasing mechanism in preference elicitation for sustainable food? First evidence from a Discrete Choice Experiment By Raffaelli, R.; Menapace, L.
  5. Indebted households in Poland and their economic situation: assessment using mobility indices By AGNIESZKA Wa??ga; GRZEGORZ Wa??ga
  6. Determinants of Adaptation Strategies to Climate Change among Rice Farmers in Southwestern Nigeria: A Multivariate Probit Approach By Ojo, T.; Baiyegunhi, L.
  7. Consumer Willingness to Pay Price Premium for Credence Attributes of Livestock Products A Meta-Analysis method By Yang, W.; Renwich, A.
  1. There are reasons researchers may be interested in accounting for spatial heterogeneity of preferences, including avoiding model misspecification and the resulting bias, and deriving spatial maps of willingness-to-pay (WTP), which are relevant for policy-making and environmental management. We employ a Monte Carlo simulation of three econometric approaches to parametrically account for spatial auto-correlation in discrete choice models. The first is based on the analysis of individual-specific estimates of the mixed logit model. The second extends this model to explicitly account for spatial correlation, instead of simply conditioning individual-specific estimates on population-level distributions and individuals’ choices. The third is the geographically weighted multinomial logit model, which incorporates spatial dimensions using geographical weights to estimate location-specific choice models. We analyze the performance of these methods in recovering population-, region- and individual-level preference parameter estimates and implied WTP in the case of spatial autocorrelation. We find that, although ignoring spatial autocorrelation did not significantly bias population-level results of the simple mixed logit model, neither individual-specific estimates nor the geographically weighted multinomial logit model was able to reliably recover the true region- and individual-specific parameters. We show that the spatially-autocorrelated mixed logit proposed in this study is promising and outline possibilities for future development.
    By: Wiktor Budziński (University of Warsaw, Faculty of Economic Sciences); Mikołaj Czajkowski (University of Warsaw, Faculty of Economic Sciences)
    Keywords: discrete choice experiment; discrete choice models; individual-, region- and population-level parameter estimates; preference heterogeneity; spatial auto-correlation
    JEL: Q51 C25 C31
    Date: 2018
    URL: http://d.repec.org/n?u=RePEc:war:wpaper:2018-24&r=dcm
  2. By: Landmann, D.; Feil, J.-H.; Lagerkvist, C.J.; Otter, V.
    Abstract: A generally accepted approach to support and increase small-scale farmers living standards in developing countries is to improve their management capacities by means of agricultural training. In this respect, capacity development is the most efficient and used method to train farmers. However, there is a lack of quantitative information about farmers preferences of those activities, which are crucial to refine capacity development activities in the future. This study employs a discrete choice experiment analysing the willingness to pay to determine the preferences of small-scale farmers for agricultural training with respect to the training method, trainer, duration, location and additional offers. The main finding is that most important for farmers are training methods including demonstration. Furthermore, farmers would like to receive additional offers during the training and would like to be trained by an trainer with an academic background. Farmers are also willing to pay for these types of training. The outcomes could provide relevant politicians and other stakeholders the opportunity to improve their training programmes and, in the end, make capacity development more efficient. Acknowledgement :
    Keywords: Research Methods/ Statistical Methods
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:ags:iaae18:277738&r=dcm
  3. By: Birkenberg, A.
    Abstract: The agri-food sector generates between 20-30% of global greenhouse gas emissions. A recent attempt to address an increasing demand for climate change mitigation in global value chains is the use of strict and high quality climate labels. However, very little is known on consumer s preferences and attitudes towards climate labels in the agri-food sector and even less on synergistic effects of climate labels in coexistence with other labels. This study examines the world s first coffee, certified as carbon neutral and consumer preferences. It investigates the willingness to pay (WTP) of German consumers for carbon neutral labels on coffee and potential synergistic effects when carbon neutral certification is combined with uncertified direct trade claims or a Fair Trade certificate. A discrete choice experiment based on a Mixed Logit Model was used to determine consumer s WTP and focus group discussions were conducted to understand the rationales. A marginal WTP of 1.70 for a carbon neutral label was identified on a 250g package of specialty coffee. A positive synergistic effect was found for the combination of a carbon neutral label with direct trade claims. Further, without according information, consumers often perceived coffee as a natural product that is not generating any emissions. Acknowledgement : We kindly acknowledge the contributions of Manuel Narjes, Bettina Reiser and Regina Birner who substantially developed and improved the research. We are also thankful for the scholarship provided by the FAZIT foundation in Germany.
    Keywords: Consumer/Household Economics
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:ags:iaae18:277277&r=dcm
  4. By: Raffaelli, R.; Menapace, L.
    Abstract: Indirect questioning (IQ), i.e., asking respondents to predict the behavior of others, has been employed in stated preference studies as WTP elicitation technique. This technique, also referred to as Inferred Valuation, represents a promising approach for reducing hypothetical bias when it is not possible to sell actual goods to participants and when the social desirability bias is a potential problem (e.g., preferences for sustainable food attributes). To date, several issues associated to the use of IQ have not been adequately investigated. We carried out a Discrete Choice Experiment on field to verify the effects on estimated WTPs of: i) different IQ framing, ii) monetary incentives associated to predictions; and iii) the order of presentation. First, by employing two different question formats (e.g. asking to predict others behavior in a real market situation or in a hypothetical situation) we uncover how respondents are able to anticipate the tendency of others to provide socially desirable answers. Second, monetary incentives create a rewarding environment that indirectly affects WTPs obtained from direct questions. Third, we uncover a potential debiasing effect on WTPs of asking respondents to make predictions about others before stating their own preferences, which could have interesting implications for practitioners. Acknowledgement :
    Keywords: Research Methods/ Statistical Methods
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:ags:iaae18:277039&r=dcm
  5. By: AGNIESZKA Wa??ga (Cracow University of Economics); GRZEGORZ Wa??ga (Cracow University of Economics)
    Abstract: Economic situation is one of the major determinants of household debt. The analysis of changes in borrowing levels in the global economic context allows for better understanding of household behaviours in the financial markets. The increase in income levels results in upgrading consumer aspirations, especially in developing countries. With some household expenses financed by credit, a growth in household debt levels can be observed. This research is based on panel data at the micro level for Polish households, obtained from the Social Diagnosis (Diagnoza Spo?eczna) study in 2009 and 2015. The purpose of this paper is to assess the impact of changing household incomes on their debt levels. The overall change in household debt levels is examined using mobility indices.The results show that the general improvement in the income situation of indebted households varies depending on the level of debt. The subjective perception of the income situation of the low-debt households has improved. In addition, the heavier the burden of loan repayments, the less likely it is that households can benefit from the favourable economic situation.
    Keywords: indebted household, economic situation, mobility indices
    JEL: D12 D14 D31
    Date: 2018–10
    URL: http://d.repec.org/n?u=RePEc:sek:iefpro:6910190&r=dcm
  6. By: Ojo, T.; Baiyegunhi, L.
    Abstract: The study analyzed the determinants of rice farmers climate change adaptation strategies in Southwestern Nigeria. A multistage sampling technique was used to collect cross sectional data from 360 rice farmers selected from three States in the region. Out of 11 adaptation strategies identified by the farmers, the five main identified adaptation strategy options were subsequently used as the dependent variables in the multivariate probit model. The result of the Multivariate Probit Model indicated that some household characteristics, access to services and location significant and statistically influenced the choice of adaptation strategies employed by the farmers in the study area. It is obvious the farmers are aware of long-term changes in climatic factors (temperature and rainfall, for example), they are unable to identify these changes as climate change. However, the positive pair wise correlation matrix from the MVP model indicate complementarities among all the adaptation strategies used by the farmers. The government could build the capacity of agricultural extension systems and make available climate change education scheme with ICT innovations. Government policies and investment strategies must be geared towards the support of education, credit and information about adaptation to climate change, including technological and institutional methods, particularly for smallholder farmers in the country. Acknowledgement :
    Keywords: Environmental Economics and Policy
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:ags:iaae18:277011&r=dcm
  7. By: Yang, W.; Renwich, A.
    Abstract: Livestock production is increasingly being regarded as resource-intensive and is attracting concerns about animal welfare and environmental sustainability. As a result, consumer awareness of these issues has led to an increasing demand for products with high quality attributes that cannot be directly experienced or identified, namely credence attributes (CAs). To our knowledge, so far no study has systematically identified the value of price premium associated with credence attributes of livestock products. In an effort to understand this issue this study conducted a meta-analysis to examine consumers WTP for different credence attributes of livestock products based on a systematic review of relevant studies. Meta-regression models are used to control for the heterogeneity of WTP estimates and investigate factors that affect the estimation of WTP. There were 555 estimates derived from 94 papers reporting WTP. Meta-regression results established the presence of systematic WTP variation associated with types of products, CAs, and locations, yet also indicated that WTP is subject to systematic variation associated with study methodology. While results are promising with regard to the ability of research to provide insight regarding WTP for CAs, they also suggest that researchers should consider the potential for methodological effects when conducting empirical WTP analysis Acknowledgement :
    Keywords: Consumer/Household Economics
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:ags:iaae18:277320&r=dcm
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