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on Discrete Choice Models |
| By: | Evan Piermon; Fernando Payró Chew |
| Abstract: | We consider an analyst whose goal is to identify a subject’s utility function through revealed preference analysis. We argue the analyst’s preference about which experiments to run should adhere to three normative principles: The first, Structural Invariance, requires that the value of a choice experiment only depends on what the experiment may potentially reveal. The second, Identification Separability, demands that the value of identification is independent of what would have been counterfactually identified had the subject had a different utility. Finally, Information Monotonicity asks that more in- formative experiments are preferred. We provide a representation theorem, showing that these three principles characterize Expected Identification Value maximization, a functional form that unifies several theories of experimental design. We also study several special cases and discuss potential applications. |
| Keywords: | choice experiments, experimental design, Revealed Preferences |
| JEL: | D81 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1471 |
| By: | von Briel, Dorine; Kemperman, Astrid; Dolnicar, Sara (The University of Queensland) |
| Abstract: | United Nations Sustainable Development Goal 12 calls for nations to ensure sustainable consumption and production. The tourism industry can contribute to this aim by reducing the provision of non-essential service components with negative environmental consequences, such as single-use plastic items. This study (1) identifies unsustainable non-essential accommodation services, (2) determines tourist preferences for each service compared to each other at aggregate and market segment levels, and (3) assesses the potential of two alternative theory-based approaches (risk reduction through autonomy and gain- and loss- framing of the price) to entice tourists to forfeit environmentally unsustainable non-essential service components. Results from a discrete choice experiment suggest that tourists see little value in most non-essential unsustainable service components and that gain-framing the price represents the most promising strategy to motivate tourists to voluntarily opt-out of such service components. Theoretical and managerial implications of these findings are discussed. |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:a9wbe_v3 |
| By: | Ghorpade, Yashodhan; Binti Jasmin, Alyssa Farha; Abdur Rahman, Amanina Binti |
| Abstract: | The changing nature of work, accelerated by the experience of the COVID-19 pandemic, has resulted in several fundamental shifts in the terms and conditions of work. Along with the clear trend of increased nonstandard employment, including through the gig economy and platform work, this poses critical questions for policies and practices of the organization of work arrangements, and about who may bear the costs of emerging arrangements. This paper explores whether workers in freelancing and standard work arrangements in Malaysia view a trade-off between flexibility and income and are willing to forgo a share of earnings for greater flexibility. The paper deploys a novel discrete choice experiment in which respondents are asked to choose their preferred job from two hypothetical job descriptions with randomly assigned attributes, namely, flexibility and associated earnings. The findings show substantial but not overwhelming preference for greater flexibility, especially among freelancers, and a clear trade-off between measures of flexibility and income. The findings also show considerable variation in the preference for flexibility, much of which is not explained by worker demographics and other observable characteristics but is consistent with other measures of the importance attached to flexibility and earning income. The analysis outlines pathways through which offering even a modicum of flexibility can enhance workers’ utility without necessarily increasing costs for employers, provides evidence of considerable preference heterogeneity, and warns against imposing uniform approaches to (in)flexible work arrangements. |
| Date: | 2023–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10630 |
| By: | Ghorpade, Yashodhan; Abdur Rahman, Amanina Binti; Binti Jasmin, Alyssa Farha |
| Abstract: | The rise of “gig” or digital platform work globally has led to both enthusiasm for its potential to create lucrative employment for large numbers of people, as well as concern about its implications for worker protection that is often provided in more standard employment. While gig work platforms may not be akin to employers in standard work relationships, arrangements that do not obligate them to provide worker protection and social insurance contributions may leave several platform workers unprotected against a range of risks. Is the observed lack of protection among digital platform workers explained by an unwillingness on part of the workers themselves to make necessary contributions for social insurance coverage This paper analyzes this question in the context of Malaysia, a rapidly growing upper-middle-income East Asian economy that has witnessed a rise in gig work in recent years. The paper deploys a novel vignette-based experiment to ascertain gig workers’ willingness to pay for social insurance coverage. The analysis finds overall a large unmet need for social insurance among gig workers, as well as a high level of willingness to pay for (especially) unemployment insurance, retirement savings, and accidental and injury insurance. This implies that the policy challenge is to channel such willingness into regular contributions for social insurance coverage through relevant and flexible options for contributions. More than subsidies, this segment of the workforce could perhaps benefit from better tailored, more flexible, and more easily accessible instruments for social insurance. The analysis also finds evidence of substitution between distinct insurance instruments. For instance, those who have access to retirement savings appear to be less willing to pay for unemployment insurance, and those with private medical insurance are less likely to contribute to the state-run injury insurance scheme. This underlines the need to approach risk insurance for digital platform workers more holistically and to consider a wider range of insurance instruments, including those offered by the private sector. |
| Date: | 2023–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10629 |
| By: | Chen, Ying; Cheshire, Paul; Wang, Xiangqing; Wang, You-Sin |
| Abstract: | Home delivery reduced the value of cities as locations to access variety in durable consumption goods. Food delivery services (FDS) are doing the same for restaurants. Home-streaming of sports or home-delivered restaurant meals are close but not perfect substitutes for the live experiences. Here we investigate the impact of FDS in Beijing. Employing a Bartik IV strategy, we find that a one standard deviation increase in the number of FDS-accessible restaurants generates a 7.1% increase in property values. The premium is estimated as equivalent to half a top-quality school. FDS appears to be changing how cities deliver welfare from consumption services and so modifies urban land rents and housing attributes. Its value and that of restaurant variety increase with household size but seems to reduce the value of well-equipped kitchens. |
| Keywords: | food delivery services; impact of choice in consumer services; hedonic analysis; changing urban consumption patterns |
| JEL: | D21 R21 O33 |
| Date: | 2024–09–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126783 |
| By: | Mark A. Andor; Lorenz Goette; Michael K. Price; Anna Schulze-Tilling; Lukas Tomberg |
| Abstract: | We compare the behavior and welfare effects of two popular behavioral interventions for resource conservation. The first intervention is social comparison reports (SC), primarily providing consumers with information motivating behavioral change. The second intervention is real-time feedback (RTF), primarily providing consumers with information facilitating behavioral change. In a field experiment with around 1, 000 participants, SC reduces water and energy use per shower by 9.4%, RTF by 28.8%, and the combination of both interventions by 35.0%. Participants’ willingness to pay for RTF and the combination is higher than for SC. We find that all interventions enhance welfare. |
| Keywords: | Resource Conservation, Welfare, Real-time Feedback, Social Comparison, Behavioral Intervention, Field Experiment |
| JEL: | D12 C93 Q25 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_651 |
| By: | Robert D. Metcalfe; Sefi Roth |
| Abstract: | Exposure to ambient air pollution has been shown to be detrimental to human health and productivity, and has motivated many policies to reduce such pollution. However, given that humans spend 90% of their time indoors, it is important to understand the degree of exposure to Indoor Air Pollution (IAP), and, if high, ways to reduce it. We design and implement a field experiment in London that monitors households’ IAP and then randomly reveals their IAP in real-time. At baseline, we find that IAP is worse than ambient air pollution when residents are at home and that for 38% of the time, IAP is above World Health Organization standards. Additionally, we observe a large household income-IAP gradient, larger than the income-ambient pollution gradient, highlighting large income disparities in IAP exposure. During our field experiment, we find that the randomized revelation reduces IAP by 17% (1.9 μg/m³) overall and 34% (5 μg/m³) during occupancy time. We show that the mechanism is households using more natural ventilation as a result of the feedback (i.e., opening up doors and windows). Finally, in terms of welfare, we find that: (i) households have a willingness to pay of £4.8 ($6) for every 1 μg/m ³ reduction in indoor PM2.5; (ii) households have a higher willingness to pay for mitigation than for full information; (iii) households have a price elasticity of IAP monitor demand around -0.75; and (iv) a £1 subsidy for an IAP monitor or an air purifier has an infinite marginal value of public funds, i.e., a Pareto improvement. |
| JEL: | Q5 Q53 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33510 |
| By: | von der Heyde, Leah (LMU Munich); Haensch, Anna-Carolina; Wenz, Alexander (University of Mannheim) |
| Abstract: | UPDATED VERSION AT https://arxiv.org/abs/2407.08563 The recent development of large language models (LLMs) has spurred discussions about whether LLM-generated “synthetic samples” could complement or replace traditional surveys, considering their training data potentially reflects attitudes and behaviors prevalent in the population. A number of mostly US-based studies have prompted LLMs to mimic survey respondents, finding that the responses closely match the survey data. However, several contextual factors related to the relationship between the respective target population and LLM training data might affect the generalizability of such findings. In this study, we investigate the extent to which LLMs can estimate public opinion in Germany, using the example of vote choice as outcome of interest. To generate a synthetic sample of eligible voters in Germany, we create personas matching the individual characteristics of the 2017 German Longitudinal Election Study respondents. Prompting GPT-3 with each persona, we ask the LLM to predict each respondents’ vote choice in the 2017 German federal elections and compare these predictions to the survey-based estimates on the aggregate and subgroup levels. We find that GPT-3 does not predict citizens’ vote choice accurately, exhibiting a bias towards the Green and Left parties, and making better predictions for more “typical” voter subgroups. While the language model is able to capture broad-brush tendencies tied to partisanship, it tends to miss out on the multifaceted factors that sway individual voter choices. Furthermore, our results suggest that GPT-3 might not be reliable for estimating nuanced, subgroup-specific political attitudes. By examining the prediction of voting behavior using LLMs in a new context, our study contributes to the growing body of research about the conditions under which LLMs can be leveraged for studying public opinion. The findings point to disparities in opinion representation in LLMs and underscore the limitation of applying them for public opinion estimation without accounting for the biases in their training data. |
| Date: | 2023–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:8je9g_v1 |
| By: | Fidanoski, Filip; Dixit, Vinayak; Ortmann, Andreas |
| Abstract: | Luckman et al. (2018) experimentally tested the conjecture that a single model of risky intertemporal choice can account for both risky and intertemporal choices, and under the conditions of their experiment, found evidence supporting it. Given the existing literature, that is a remarkable result which warrants (conceptual) replication. Following a tradition in psychology, Luckman et al. (2018) had first-year psychology students participate that were rewarded with non-monetary course credits (see also Luckman et al., 2020). Proper incentivisation is a long-standing bone of contention among experimentally working economists and psychologists, last but not least when it comes to the elicitation of preferences of any kind. Another reason to be sceptical is that the experiment was not properly powered up; the no-difference results reported by the authors might be spurious. In our conceptual replication of Luckman et al. (2018), we find significant differences between the risky and intertemporal choices at both the group and individual level. We find further that there is no significant difference between choices made by participants that are paid a flat incentive and participants that are paid under the random incentive scheme, at the group level. We find that order effects matter for intertemporal choices, but not for risky choices. At the individual level, we find evidence in favour of the model that assumes a common value function, but separate choice functions. This result is robust across our incentive systems, and order of presentation, but sensitive to different prior distributions. |
| Keywords: | experimental practices, replication, risky intertemporal preferences, risk preferences, time preferences |
| JEL: | C11 C52 C91 D01 D81 D90 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:205 |