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on Discrete Choice Models |
| By: | Jonathan Chapman (NYUAD); Mark Dean (Columbia University); Pietro Ortoleva (Princeton University); Erik Snowberg (UBC, CESifo, NBER); Colin Camerer (Caltech) |
| Abstract: | A vast literature documents that willingness to pay (WTP) is less than willingness to accept (WTA) a monetary amount for an object, a phenomenon called the endowment effect. Using data from three incentivized studies with a total representative sample of 4,000 U.S. adults, we add one additional finding: WTA and WTP for a lottery are (essentially) uncorrelated. In contrast, independent measures of WTA (or WTP) are highly correlated, and relatively stable across time. Leading models of reference dependent preferences are compatible with a zero correlation between WTA and WTP, but only for specific parameterizations and ruling out popular special cases. These models also predict a relationship between the endowment effect and loss aversion, which we do not find. |
| Keywords: | Willingness To Pay, Willingness To Accept, Endowment Effect, Loss Aversion |
| JEL: | C90 D81 D91 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2021-90&r= |
| By: | Diekert, Florian; Eymess, Tillmann; Goeschl, Timo; Gómez-Cardona, Santiago; Luomba, Joseph |
| Abstract: | Like many common-pool resources, the Lake Victoria fisheries are characterized by poor compliance with production input regulations that are intended to reduce overexploitation. To explore the use of input subsidies to increase compliance, we determine the subsidy level required to induce demand for legal fishing nets, thereby compensating fishermen for loss of productivity net of enforcement risk. Our study additionally tests the subsidy-enhancing effect of a norm-nudge. A new multiple price list mechanism for eliciting revealed willingness to pay for multiple units of a production input is developed, adapted to the demands of a challenging field setting, and implemented with 462 fishermen at 20 landings sites on the Tanzanian lakeshore. Consistent with the high prevalence of illegal fishing gear at our sites, we find a zero median demand for legal net panels at local market prices. The subsidy required to shift median demand to at least one legal net panel is a 21% discount. Norm-nudging generates no policy-relevant enhancement of the subsidy. |
| Keywords: | compliance; natural resource management; subsidies |
| Date: | 2022–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0711&r= |
| By: | Zaring, Caitlin S.; Jensen, Kimberly L.; Rihn, Alicia L.; Hughes, David W.; Morgan, Mark T. |
| Abstract: | Packaging of fluid milks can serve as an initial market entry point for dairy farmers to enter into on-farm processing due to the product requiring less equipment and facilities investment than other dairy products. Understanding consumer preferences for milk that is produced and processed on-farm (farmstead) can aid in understanding the share of milk consumers who are interested in purchasing on-farm processed milk, the attributes of those most interested in the product to aid in target marketing, and consumers’ preferred outlets to purchase farmstead milk (FSM) which can assist in marketing the product. In addition, some dairy farmers may host visitors on-farm, either serving as an agritourism venue with educational tours about how milk is produced or on-farm stores to buy the processed milk. FSM is defined in this study as milk where the farmer produces the milk and then processes and packages on a Tennessee dairy farm. FSM may be sold directly to consumers at on-farm stores or farm stands, through farmers markets, through home delivery, or it may be sold by other sellers such as grocery stores, specialty stores or restaurants. The overall goal of this study is to provide a better understanding of Tennessee milk and dairy products consumers’ views about and preferences for FSM. Specific objectives of this study are to ascertain: a. prior knowledge about and purchases of FSM, b. interest in future purchases of FSM, c. how demographics vary across prior purchases and future interest in purchasing FSM, d. projected FSM purchases and expenditures among those interested in purchasing FSM, e. attitudes about on-farm produced and processed milk and dairy products, f. anticipated outlets where respondents would purchase FSM among those interested in purchasing it, and g. on farm purchases and visits by those interested in visiting a dairy farm. |
| Keywords: | Agribusiness, Farm Management, Marketing |
| Date: | 2022–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:utaeer:319770&r= |
| By: | Ruiz-Gazen, Anne; Thomas-Agnan, Christine; Laurent, Thibault; Mondon, Camille |
| Abstract: | Invariant Coordinate Selection (ICS) is a multivariate statistical method introduced by Tyler et al. (2009) and based on the simultaneous diagonalization of two scatter matrices. A model based approach of ICS, called Invariant Coordinate Analysis, has already been adapted for compositional data in Muehlmann et al.(2021). In a model free context, ICS is also helpful at identifying outliers (Nordhausen and Ruiz-Gazen, 2022). We propose to develop a version of ICS for outlier detection in compositional data. This version is first introduced in coordinate space for a specific choice of ilr coordinate system associated to a contrast matrix and follows the outlier detection procedure proposed by Archimbaud et al. (2018a). We then show that the procedure is independent of the choice of contrast matrix and can be defined directly in the simplex. To do so, we first establish some properties of the set of matrices satisfying the zero-sum property and introduce a simplex definition of the Mahalanobis distance and the one-step M-estimators class of scatter matrices. We also need to define the family of elliptical distributions in the simplex. We then show how to interpret the results directly in the simplex using two artificial datasets and a real dataset of market shares in the automobile industry. |
| Date: | 2022–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126752&r= |
| By: | Ziheng Wang; Justin Sirignano |
| Abstract: | We develop a new continuous-time stochastic gradient descent method for optimizing over the stationary distribution of stochastic differential equation (SDE) models. The algorithm continuously updates the SDE model's parameters using an estimate for the gradient of the stationary distribution. The gradient estimate is simultaneously updated, asymptotically converging to the direction of steepest descent. We rigorously prove convergence of our online algorithm for linear SDE models and present numerical results for nonlinear examples. The proof requires analysis of the fluctuations of the parameter evolution around the direction of steepest descent. Bounds on the fluctuations are challenging to obtain due to the online nature of the algorithm (e.g., the stationary distribution will continuously change as the parameters change). We prove bounds for the solutions of a new class of Poisson partial differential equations, which are then used to analyze the parameter fluctuations in the algorithm. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.06637&r= |
| By: | Strulik, Holger |
| Abstract: | In this paper, I propose a life cycle model of occupational choice with endogenous health behavior, aging, and longevity. Health-demanding work leads to a faster accumulation of health deficits and is remunerated with a hazard markup on wages. Health deficit accumulation is also influenced by unhealthy consumption and health care expenditure. I calibrate the model for a 20 year old average American in 2010 and show the following results, among others. Health-demanding work is ceteris paribus preferred by male, young, and healthy individuals with a relatively low level of education. Health demanding work has a negligible effect on health behavior because income and health investment effects largely offset each other, implying that health effects can be attributed almost fully to the direct health burden of work. Better medical technology induces low-skilled individuals to spend a greater part of their life in health-demanding work and thus increases the health gradient of education. High wealth endowments protect against unhealthy occupational choices. I show robustness of the results in an extension of the model with regard to endogenous retirement. |
| Keywords: | occupational choice,health behavior,health deficits,aging,longevity,retirement |
| JEL: | D15 I10 I12 J24 J26 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:432&r= |