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on Discrete Choice Models |
| By: | Ajayi, V.; Reiner, D. |
| Abstract: | Plastics is one of the hardest sectors to decarbonise but there are concerns over the willingness of consumers to pay higher prices to shift away from reliance on unabated fossil energy. Moreover, widespread concerns over single-use plastics have redoubled efforts to reformulate plastics used in consumer products, so we analyze heterogeneity in consumer preferences and willingness to pay for environmentally friendly attributes of plastic bottles. Our study employs stated preference data from a discrete choice experiment conducted using a representative sample of 3085 British consumers. We estimate different mixed logit models in preference and willingness to pay space and also examine the preference heterogeneity to infer consumers’ sensitivity to price. We find that British consumers are willing to pay a £1.10 premium for a £1 plastic bottle if 100% of the CO2 were to be captured during the production process. To a lesser extent, we also find differential willingness to pay depends on other characteristics such as the national origins of the materials and the type of certification employed. Preferences are driven by specific characteristics, such as involvement in environmental organisations or knowledge of bioplastics, both of which are associated with higher willingness to pay for green plastics. |
| Keywords: | Bio-based plastics, mixed logit, preferences heterogeneity, discrete choice experiment, willingness to pay, industrial decarbonisation, carbon capture |
| JEL: | D12 C25 Q51 |
| Date: | 2020–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:20110&r=all |
| By: | Thomas Favory (Economics Discipline, Business School, University of Western Australia) |
| Abstract: | This paper proves the existence and uniqueness of Bertrand-Nash equilibrium in oligopolies, where each firm may sell multiple substitutes of the same good. Bertrand competition emerges as a limit case when the number of products per firm increases if the consumers’ willingness to pay for products follow a sufficiently slim-tailed distribution. In opposition, the double exponential distribution is not slim enough, and firms conserve monopolistic power even for an arbitrarily large number of products per firm. Moreover, the double exponential distribution provides closed-form solutions that relate to discrete choice theory. First, a duality with representative consumers helps recover multinomial logit (MNL) demand functions and constant elasticity of substitution (CES) utility functions. Second, the game in which firms sequentially set the quality, then the price of their products, has a unique equilibrium. |
| Keywords: | Multiproduct firms, Price competition, Oligopoly, Discrete choice, Product differentiation |
| JEL: | D21 D43 L12 L13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:20-24&r=all |
| By: | Anthony PARIS; Pascal GASTINEAU; Pierre-Alexandre MAHIEU; Benoît CHEZE |
| Keywords: | , biofuels, discrete choice experiment, social acceptance, willingness to pay |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:leo:wpaper:2828&r=all |
| By: | Khuc, Quy Van; Nong, Duy; Phu, Tri Vu |
| Abstract: | To be considered one of the most dynamic cities in the world, Hanoi, the capital of Vietnam, has been facing an increasingly extreme environmental pollution. For example, in 2019, Hanoi ranked the world’s seventh most polluted capital city, which has raised serious concerns about the detrimental impacts on living environment and health of urban citizens. This study aims to examine how well urban citizens perceive, how well they take action to mitigate it, and how ready they are to contribute to reducing air pollution. A stratified sampling technique coupled with a contingent valuation and a face-to-face interview method was employed to survey 475 inhabitants who live in Hanoi, the capital of Vietnam. The results show that over two-thirds of the inhabitants surveyed are willing to pay for air environment funds and the mean value of WTP is from approximately 122.9 to 123.5 thousand VND per household per month. WTP is associated with a set of endogenous and exogenous factors including age group, level of current air pollution, income, and awareness towards environmental protection solutions. Our results reveal that urban citizens well learn about air pollution and they have a real and strong demand for reducing air pollution, which could help design a desirable policy and or solutions for improving air quality. |
| Date: | 2020–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:pume6&r=all |
| By: | Brian Feld (Universidad EAFIT); AbdelRahman Nagy (J-PAL); Adam Osman (University of Illinois at Urbana-Champaign) |
| Abstract: | Understanding jobseeker preferences, including their reservation wages and how much they value different non-wage amenities, is difficult because these parameters are not directly observable. We run an experiment at a job matching center in which we test four different methods for estimating these parameters. We find large and important differences between the methods, with the method most commonly used in household and labor force surveys - open ended questions - performing worst, and a short set of discrete choices performing best. We then use the data to estimate job seekers’ valuations of different job attributes and explore how valuations differ by job seeker characteristics such as gender, education and duration of unemployment. Among other findings, we show that in our sample of jobseekers in Egypt, women are more sensitive to long commutes and value flexible schedules more than men. These finds have important implications for researchers who use and collect data on reservation wages and for policymakers and employers who aim to decrease matching frictions. |
| Date: | 2020–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1414&r=all |