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on Discrete Choice Models |
| By: | Prateek Bansal; Rico Krueger; Michel Bierlaire; Ricardo A. Daziano; Taha H. Rashidi |
| Abstract: | The standard Gibbs sampler of Mixed Multinomial Logit (MMNL) models involves sampling from conditional densities of utility parameters using Metropolis-Hastings (MH) algorithm due to unavailability of conjugate prior for logit kernel. To address this non-conjugacy concern, we propose the application of P\'olygamma data augmentation (PG-DA) technique for the MMNL estimation. The posterior estimates of the augmented and the default Gibbs sampler are similar for two-alternative scenario (binary choice), but we encounter empirical identification issues in the case of more alternatives ($J \geq 3$). |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1904.07688&r=all |
| By: | Prateek Bansal; Yang Liu; Ricardo Daziano; Samitha Samaranayake |
| Abstract: | We formalize one aspect of reliability in the context of Mobility-on-Demand (MoD) systems by acknowledging the uncertainty in the pick-up time of these services. This study answers two key questions: i) how the difference between the stated and actual pick-up times affect the propensity of a passenger to choose an MoD service? ii) how an MoD service provider can leverage this information to increase its ridership? We conduct a discrete choice experiment in New York to answer the former question and adopt a micro-simulation-based optimization method to answer the latter question. In our experiments, the ridership of an MoD service could be increased by up to 10\% via displaying the predicted wait time strategically. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1904.07987&r=all |
| By: | Li, Bolun (Rice U); Sickles, Robin C. (Rice U); Williams, Jenny (U of Melbourne) |
| Abstract: | Peers and friends are among the most influential social forces affecting adolescent behavior. In this paper we investigate peer effects on post-high school career decisions and on school choice. We define peers as students who are in the same classes and social clubs and measure peer effects as spatial dependence among them. Utilizing recent development in spatial econometrics, we formalize a spatial multinomial choice model in which individuals are spatially dependent in their preferences. We estimate the model with data from the Texas Higher Education Opportunity Project. We do find that individuals are positively correlated in their career and college preferences and examine how such dependencies impact decisions directly and indirectly as peer effects are allowed to reverberate through the social network in which students reside. |
| JEL: | C31 C35 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:riceco:19-001&r=all |
| By: | Dupoux, Marion (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinet, Vincent (Economie Publique, AgroParisTech, INRA, University of Paris-Saclay) |
| Abstract: | Theoretical models often assume the environment to be a normal good, irrespective of one’s income. However, a priori, nothing prohibits an environmental good from being normal for some individuals and inferior for others. We develop a conceptual framework in which private consumption and an environmental public good act as substitutes or com-plements for satisfying different needs. Subsequently, the environment can switch between normal and inferior depending on one’s income and environment. If the environment is in-ferior for some range of income, then the willingness to pay for environmental preservation becomes non-monotonic, thereby having implications for benefit transfers. |
| Keywords: | substitutability; environmental public goods; context; willingness to pay; inferior goods; needs |
| JEL: | D11 H41 Q50 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0759&r=all |
| By: | Niek Mouter (Delft University of Technology); Paul Koster (Vrije Universiteit Amsterdam); Thijs Dekker (University of Leeds) |
| Abstract: | Cost-Benefit Analysis (CBA) for public policies assumes ‘consumer sovereignty’, implying that impacts of government projects can be valued by aggregating individuals’ private willingness to pay. However, individuals’ private willingness to pay might not reflect their preferences towards public policies. Participatory Value Evaluation (PVE) is a novel evaluation approach which rectifies this limitation of CBA. PVE establishes the social welfare effects of government projects through the elicitation of individuals’ preferences over the allocation of public budgets as well as their net income. The most important innovation of PVE is therefore that the approach goes beyond the paradigm of ‘consumer sovereignty’ by starting from the assumption of ‘citizen sovereignty’. This paper positions PVE relative to past innovations in applied welfare economics and illustrates the potential of the approach through a case study on flood protection schemes in the Netherlands. |
| Keywords: | Cost-benefit analysis; Partipatory value evaluation; Participatory budgetting; Consumer sovereignty |
| JEL: | D71 D61 D63 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190024&r=all |
| By: | Nail Kashaev; Natalia Lazzati |
| Abstract: | This paper develops a dynamic model of discrete choice that incorporates peer effects into consideration sets. We characterize equilibrium behavior and study the empirical content of the dynamic model we offer. In our set-up, the choices of friends act as exclusion restrictions in the stochastic variation of the subset of alternatives that each person considers at the moment of picking an option. They allow us to recover (from a sequence of observed choices) the ranking of preferences of each person, the attention mechanism, and the set of connections or nodes between the people in the network. The identification strategy we offer does not rely on the variation of the set of available options (or menus) which remain the same across all the observations. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1904.06742&r=all |
| By: | Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Katarzyna Zagórska (Faculty of Economic Sciences, University of Warsaw); Natalia Letki (Faculty of Political Science and International Studies, University of Warsaw); Piotr Tryjanowski (Poznań University of Life Sciences, Institute of Zoology); Adam Wąs (Warsaw University of Life Sciences, Faculty of Economic Sciences) |
| Abstract: | Agri-environmental schemes have become an integral tool of land use management policies in ecologically valuable river valleys, that are commonly recognized as very important bird habitats. When high adoption of extensive agricultural practices is not only a political goal, but also a necessary condition for conservation of vulnerable ecosystems, understanding of farmers’ preferences is utterly important. Therefore, we use the case of Biebrza Marshes – a wetland complex and one of the largest wildlife refuges in Europe, which is located in northeastern Poland – and employ stated preference methods to investigate farmers’ preferences for adopting several agricultural practices, such as precision fertilization, crop diversification, catch crops, peatland protection, extensive use of meadows, and the reduction of livestock stocking density. Farmers’ willingness to participate in selected practices is explained using farms’ and farmers’ characteristics, subjectively and objectively measured farmers’ environmental knowledge, as well as by experimentally controlled information treatments about environmental benefits of agri-environmental contracts. The results provide new insights into the sources of farmers’ preference heterogeneity and show how different motivations relate to participation in agri-environmental schemes. Based on the results and consultations with local stakeholders, we make recommendations for a more efficient design and targeting of land use management instruments, including future agri-environmental schemes. |
| Keywords: | agri-environmental schemes, farmers’ preferences, choice experiments, agrobiodiversity protection, agri-environment, payments for ecosystem services |
| JEL: | Q18 Q12 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2019-06&r=all |
| By: | Dominique Ami (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Frédéric Aprahamian (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Olivier Chanel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Stated preference surveys are usually carried out in one session, without any follow-up interview after respondents have had the opportunity to experience the public goods or policies they were asked to value. Consequently, a stated preference survey needs to be designed so as to provide respondents with all the relevant information, and to help them process this information so they can perform the valuation exercise properly. In this paper, we study experimentally an elicitation procedure in which respondents are provided with a sequence of different types of information (social cues and objective information) that allows them to sequentially revise their willingness-to-pay (WTP) values. Our experiment was carried out in large groups using an electronic voting system which allows us to construct social cues in real time. To analyse the data, we developed an anchoring-type structural model that allows us to estimate the direct effect (at the current round) and the indirect effect (on subsequent rounds) of information. Our results shed new light on the interacted effect of social cues and objective information: social cues have little or no direct effect on WTP values but they have a strong indirect effect on how respondents process scientific information. Social cues have the most noticeable effect on respondents who initially report a WTP below the group average but only after receiving additional objective information about the valuation task. We suggest that the construction and the provision of social cues should be added to the list of tools and controls for stated preference methods. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01897065&r=all |
| By: | Villas-Boas, Sofia B; Kiesel, Kristin; Berning, Joshua; Chouinard, Hayley; McCluskey, Jill |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2019–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt58j648mk&r=all |