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on Discrete Choice Models |
| By: | Meles, Tensay Hadush (Economic and Social Research Institute, Ireland); Lokina, Razack (University of Dar es Salaam); Mtenga, Erica Louis (Georgia State University); Tibanywana, Julieth Julius (School of Economics, University of Dar es Salaam, Tanzania) |
| Abstract: | Stated preference studies are often based on the assumptions that proposed outcomes would be realized with certainty and respondents believe their survey responses are consequential. This paper uses split sample treatments to test whether survey consequentiality and outcome uncertainty lead to differences in welfare measures, focusing on a discrete choice experiment on improving quality of electricity supply among business enterprises in Tanzania. Our results show that while survey consequentiality and outcome uncertainty have some influence on preferences and willingness to pay (WTP) estimates for certain attributes, they do not significantly affect overall welfare estimates. The findings highlight that incorporating uncertainty and survey consequentiality into a stated preference study could improve its credibility but may not have substantial economic or statistical imp |
| Keywords: | Stated preferences; Survey consequentiality; Outcome uncertainty; Discrete choice experiment; Power outages; Business enterprises; Tanzania |
| JEL: | D22 D81 L94 Q58 |
| Date: | 2023–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunefd:2023_016&r=dcm |
| By: | Jose Ignacio Hernandez; Niek Mouter; Sander van Cranenburgh |
| Abstract: | Random utility maximisation (RUM) models are one of the cornerstones of discrete choice modelling. However, specifying the utility function of RUM models is not straightforward and has a considerable impact on the resulting interpretable outcomes and welfare measures. In this paper, we propose a new discrete choice model based on artificial neural networks (ANNs) named "Alternative-Specific and Shared weights Neural Network (ASS-NN)", which provides a further balance between flexible utility approximation from the data and consistency with two assumptions: RUM theory and fungibility of money (i.e., "one euro is one euro"). Therefore, the ASS-NN can derive economically-consistent outcomes, such as marginal utilities or willingness to pay, without explicitly specifying the utility functional form. Using a Monte Carlo experiment and empirical data from the Swissmetro dataset, we show that ASS-NN outperforms (in terms of goodness of fit) conventional multinomial logit (MNL) models under different utility specifications. Furthermore, we show how the ASS-NN is used to derive marginal utilities and willingness to pay measures. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.13198&r=dcm |
| By: | Tibesigwa, Byela (Environment for Development (EfD) in Tanzania, University of Dar Es Salaam; and a Research Associate at the Environmental Policy Research Unit (EPRU), University of Cape Town); Ntuli, Herbert (EfD - Environmental Policy Research Unit (EPRU) in the School of Economics at the University of Cape Town.); Muta, Telvin (Jomo Kenyatta University of Agriculture and Technology (JKUAT) in Nairobi, Kenya) |
| Abstract: | Sub-Saharan Africa’s urban ecosystem is under considerable pressure due to rapid urban sprawl and high direct dependency on the natural ecosystem. But the value of nature conservation or restoration is poorly understood. The current paper reports the results of an investigation of willingness to pay for nature restoration and conservation in Dar es Salaam, Tanzania. To account for preference and scale heterogeneity a menu of models - random parameter logit, generalised multinomial and latent class model - with varying assumptions are employed. Findings are that the marginal WTP is highest in relation to forests, where WTP is between TSH88- and TSH331, (US$0.04 – US$0.17) depending on the estimation model. This is followed by WTP for restoration and conservation of rivers, the value of which is TSH5- TSH53 (US$0 – US$0.03). The value placed on conservation of coasts is TSH2-TSH23 (US$0 – US$0.01). The low value placed on nature restoration and conservation by residents in the city of Dar es Salaam open up policy dialogue on the importance of nature in cities amidst rapid urbanization in the region. The figures also cast doubt on the potential for generating revenue to finance green infrastructure from the residents of cities in developing countries. The maximum revenue that can be collected ranges from US$43650 for coasts and US$743050 for forests. Lack of environmental awareness and concern translates into environmentally unsustainable behaviour in cities such as starting of veldt fires, deforestation, wetland conversion, stream bank cultivation and littering of beaches. Our results suggest the need for massive awareness campaigns to sensitize the city’s residents about different attributes of nature and their value in provision of ecosystems goods and services to charge their perceptions and attitudes. |
| Keywords: | choice modelling; WTP; conservation; restoration; forests; rivers; coasts; heterogeneity; Tanzania |
| JEL: | Q25 Q53 Q57 |
| Date: | 2023–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunefd:2023_007&r=dcm |
| By: | Tibesigwa, Byela (University of Dar Es Salaam); Ntuli, Herbert (EfD - Environmental Policy Research Unit (EPRU) in the School of Economics at the University of Cape Town); Muta, Telvin (Jomo Kenyatta University of Agriculture and Technology (JKUAT) in Nairobi, Kenya) |
| Abstract: | We are living in a crisis era, with competing land-use for finite land and ill-informed myopic urban land-use policies that remain stagnant, in a world with rapidly changing urban environment, such as the mushrooming urban agriculture. While smallholder farms in and around cities, in sub-Saharan Africa, provide many ecosystem services including boosting household income and nutrition, access to land constrains these benefits. This paper examines the willingness to pay for urban farm plots, using a random parameter logit model. The estimation reveals that the marginal WTP for irrigation is US$19.47 per plot. With regard to plot size, households are willing to pay US$6.09 per hectare, while WTP for the distance to the plot is US$3.95per km per annum. WTP for an irrigated plot is about three times that of plot size and almost five times that of distance to the plot, a signal of adaptation to climate change due to extreme weather changes and water shortages in Tanzania. There is a high preference for mixed cropping, i.e., mixed vegetables and fruits. Approximately 10% of the households prefer purely subsistence farming, i.e., retaining all harvest for own consumption. The remaining 90% prefer semi-subsistence, where 57% would retain a quarter of the harvest for consumption, 27% would retain half and 6% would retain three-quarters, suggesting that farms would increase urban households’ food security. Our paper nudges policymakers to interrogate current policies and craft future inclusive green economy strategies that include urban agriculture and irrigation infrastructure. |
| Keywords: | land; urban farms; agriculture ecosystems; WTP; green economy; Tanzania |
| JEL: | Q57 |
| Date: | 2022–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunefd:2022_019&r=dcm |
| By: | Chakraborty, Debapriya PhD; Konstantinou, Theodora PhD; Gutierrez Lopez, Julia Beatriz MSc; Tal, Gil |
| Abstract: | The primary metric for measuring electric vehicle (EV) adoption growth is new car sales. However, to enable mass market penetration, EV adoption in the used car market will play a crucial role. The used vehicle market is relatively under-studied or has been studied mostly for specific regions. This project analyzed US national consumer expenditure survey data that tracks households' expenditure on vehicle acquisition and operation. The study aim is to understand new versus used vehicle choice behavior and the consequent cost of vehicle ownership, with the larger aim of determining how much households who generally buy used vehicles can gain or lose if they transition from a used internal combustion engine vehicle (ICEV) to a used EV. A choice model and cluster analysis showed that ownership of used vehicles is influenced by family size, income, housing tenure, and age. For lower-income renters, current vehicle ownership and purchase costs tend to constitute a high fraction of their household income, raising concerns related to equity and suggesting that these households in particular should be considered in policies to encourage the EV transition. Moreover, while at present the average price paid for a used ICEV is approximately $18, 000, the price of a comparable used EV can range between $14, 000 (e.g., lower electric range Nissan Leaf) to $50, 000 (high-range Tesla), suggesting the need for incentives to encourage the used EV market. |
| Keywords: | Engineering, Electric vehicles, used vehicle industry, automobile ownership, households, choice models, operating costs |
| Date: | 2024–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt3jh4f34x&r=dcm |
| By: | Wibbenmeyer, Matthew (Resources for the Future); Joiner, Emily (Resources for the Future); Lennon, Connor; Walls, Margaret A. (Resources for the Future); Ma, Lala (Resources for the Future) |
| Abstract: | The costs of natural disasters in the United States have increased in recent years, and, among disaster types, losses to wildfires have risen most sharply. The distribution of costs across households depends, in part, on household incomes and relative willingness to accept (WTA) wildfire risk. Studies have shown that households living in high wildfire hazard areas have higher incomes on average, but this could change with changes in risks, market environments (e.g., insurance), and regulation. In this paper, we use a discrete choice residential sorting model to study relative WTA wildfire hazard among households with different levels of income and wildfire experience. A spatial discontinuity in California’s natural hazard disclosure laws allows us to distinguish aversion to hazard, when it is made salient to buyers at the time of purchase, from preferences toward correlated amenities, such as forest cover. We have three core findings. First, regulatory disclosure matters. In areas where disclosure is required, households are averse to fire hazard. Second, aversion is increasing in income, which suggests that lower-income households may replace high-income households in high-hazard areas, raising concerns about distributional justice. Finally, individual experience with wildfire events does not increase aversion to hazard, suggesting that experience is not a replacement for disclosure in motivating informed decision-making. |
| Date: | 2024–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-24-05&r=dcm |
| By: | M. Hashem Pesaran; Andreas Pick; Allan Timmermann |
| Abstract: | We provide a comprehensive examination of the predictive accuracy of panel forecasting methods based on individual, pooling, fixed effects, and Bayesian estimation, and propose optimal weights for forecast combination schemes. We consider linear panel data models, allowing for weakly exogenous regressors and correlated heterogeneity. We quantify the gains from exploiting panel data and demonstrate how forecasting performance depends on the degree of parameter heterogeneity, whether such heterogeneity is correlated with the regressors, the goodness of fit of the model, and the cross-sectional ($N$) and time ($T$) dimensions. Monte Carlo simulations and empirical applications to house prices and CPI inflation show that forecast combination and Bayesian forecasting methods perform best overall and rarely produce the least accurate forecasts for individual series. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.11198&r=dcm |
| By: | Günnur Ege Bilgin; Cavit Görkem Destan |
| Abstract: | We present a model demonstrating politicians strategically adopt extreme positions even when the voters are homogeneous and moderate. We examine the behavior of voters and electoral candidates under the assumption that the salience of political issues affects voting decisions through voter preferences. Voters have limited attention, which is unintentionally captured by distinctive policies. We demonstrate that candidates who differ in their budget constraints and voters with such limited attention can account for extremist policies, even though voters are identical in their preferences. Subsequently, we examine the elections with decoy candidates unlikely to win. Even though these candidates do not attract the voters, they might still influence the election outcome by altering salience. Moreover, we provide experimental evidence that salience affects consumer preferences and election outcomes using a representative sample of Turkey's vote base. |
| Keywords: | salience bias, extremism |
| JEL: | D72 D91 C9 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_542&r=dcm |
| By: | Aknouche, Abdelhakim; Rabehi, Nadia |
| Abstract: | This work proposes a class of seasonal autoregressive integrated moving average models whose period is an independent and identically distributed random process valued in a finite set. The causality, invertibility, and autocovariance shape of the model are first revealed. Then, the estimation of the parameters which are the model coefficients, the innovation variance, the probability distribution of the period, and the (unobserved) sample-path of the period, is carried out using the expectation-maximization algorithm. In particular, a procedure for random elimination of seasonality is proposed. An application of the methodology to the annual Wolfer sunspot numbers is provided. |
| Keywords: | Seasonal ARIMA models, irregular seasonality, random period, non-integer period, SARIMAR model, EM algorithm. |
| JEL: | C13 C18 C52 |
| Date: | 2024–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120758&r=dcm |
| By: | Tushar Gahlaut; Gourav Dwivedi |
| Abstract: | Electric vehicles (EVs) are increasingly becoming popular as a viable means of transportation for the future. The use of EVs may help in providing better climatic conditions in urban areas with a pocket friendly cost for transportation to the consumers throughout its life. EVs enact as a boon to the society by providing zero tailpipe emissions, better comfort, low lifecycle cost and higher connectivity. The article aims to provide scientific information throughout the literature across various aspects of EVs in their lifetime and thus, assist the scholarly community and various organisations to understand the impact of EVs. In this study we have gathered information from the articles published in SCOPUS database and through grey literature with the focus of information post 2009. We have also used a hybrid methodology using Best-Worst Method (BWM) and technique for order preference by similarity to ideal solution (TOPSIS) for comparing EVs, internal combustion engine vehicles (ICEVs) and hybrid vehicles in various price segments. The study has helped us conclude that EVs should be preferred over ICEVs and hybrids by the users. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.11705&r=dcm |
| By: | Hardman, Scott PhD; Chakraborty, Amrita PhD; Hoogland, Kelly; Sugihara, Claire |
| Abstract: | This project provides a literature review of research on zero emission vehicles (ZEVs) which includes fuel cell vehicles, battery electric vehicles, and plug-on hybrid electric vehicles, the latter are referred to as plug-in electric vehicles (PEV). In the review we focus on PEVs due to a lack of literature on fuel cell vehicles. We consider buyer and consumer perceptions of PEVs including perceived barriers to PEV adoption, consumer knowledge of PEVs, issues associated with incentives, and issues associated with infrastructure. The aim is to understand potential barriers to higher PEV sales and future research needs relating to PEV adoption. The PEV market shows many signs of becoming more robust. This includes PEV buyer demographics shifting toward the demographics of buyers of all types of new cars and improvements in PEV technology. Some challenges may remain, however. These include understanding the needs of households without home charging, engaging female car buyers in PEVs, engaging more of the general population in the PEV transition, substantially reducing PEV purchase prices, and incentive discontinuities potentially impacting adoption. Finally, disparities in rebate allocation, infrastructure deployment, and PEV sales indicate the transition is not yet equitable. This may require specific policy actions to address. |
| Keywords: | Engineering, Zero emission vehicles, plug-in hybrid vehicles, incentives, consumer behavior, demographics, electric vehicle charging, automobile ownership |
| Date: | 2022–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt8dt5b2q6&r=dcm |