Site choices in recreational demand: a matter of utility maximization or regret minimization?

This paper compares the Random Regret Minimization and the Random Utility Maximization models for determining recreational choice. The Random Regret approach is based on the idea that, when choosing, individuals aim to minimize their regret – regret being defined as what one experiences when a non-chosen alternative in a choice set performs better than a chosen one in relation to one or more attributes. The Random Regret paradigm, recently developed in transport economics, presents a tractable, regret-based alternative to the dominant choice paradigm based on Random Utility. Using data from a travel cost study exploring factors that influence kayakers’ site-choice decisions in the Republic of Ireland, we estimate both the traditional Random Utility multinomial logit model (RU-MNL) and the Random Regret multinomial logit model (RR-MNL) to gain more insights into site choice decisions. We further explore whether choices are driven by a utility maximization or a regret minimization paradigm by running a binary logit model to examine the likelihood of the two decision choice paradigms using site visits and respondents characteristics as explanatory variables. In addition to being one of the first studies to apply the RR-MNL to an environmental good, this paper also represents the first application of the RR-MNL to compute the Logsum to test and strengthen conclusions on welfare impacts of potential alternative policy scenarios.

Choice of contracts in the British National Health Service: An empirical study

Following major reforms of the British National Health Service (NHS) in 1990, the roles of purchasing and providing health services were separated, with the relationship between purchasers and providers governed by contracts. Using a mixed multinomial logit analysis, we show how this policy shift led to a selection of contracts that is consistent with the predictions of a simple model, based on contract theory, in which the characteristics of the health services being purchased and of the contracting parties influence the choice of contract form. The paper thus provides evidence in support of the practical relevance of theory in understanding health care market reform. © 2008 Elsevier B.V. All rights reserved.

Willingness to Pay for Rural Landscape Improvements: Combining Mixed Logit and Random-Effects Models

This paper reports the findings from a discrete-choice experiment designed to estimate the economic benefits associated with rural landscape improvements in Ireland. Using a mixed logit model, the panel nature of the dataset is exploited to retrieve willingness-to-pay values for every individual in the sample. This departs from customary approaches in which the willingness-to-pay estimates are normally expressed as measures of central tendency of an a priori distribution. Random-effects models for panel data are subsequently used to identify the determinants of the individual-specific willingness-to-pay estimates. In comparison with the standard methods used to incorporate individual-specific variables into the analysis of discrete-choice experiments, the analytical approach outlined in this paper is shown to add considerable explanatory power to the welfare estimates.

Inference with multinomial data: why to weaken the prior strength

This paper considers inference from multinomial data and addresses the problem of choosing the strength of the Dirichlet prior under a mean-squared error criterion. We compare the Maxi-mum Likelihood Estimator (MLE) and the most commonly used Bayesian estimators obtained by assuming a prior Dirichlet distribution with non-informative prior parameters, that is, the parameters of the Dirichlet are equal and altogether sum up to the so called strength of the prior. Under this criterion, MLE becomes more preferable than the Bayesian estimators at the increase of the number of categories k of the multinomial, because non-informative Bayesian estimators induce a region where they are dominant that quickly shrinks with the increase of k. This can be avoided if the strength of the prior is not kept constant but decreased with the number of categories. We argue that the strength should decrease at least k times faster than usual estimators do.

The validity of a latent class typology of adolescent drinking patterns

Objectives: This study examined the validity of a latent class typology of adolescent drinking based on four alcohol dimensions; frequency of drinking, quantity consumed, frequency of binge drinking and the number of alcohol related problems encountered. Method: Data used were from the 1970 British Cohort Study sixteen-year-old follow-up. Partial or complete responses to the selected alcohol measures were provided by 6,516 cohort members. The data were collected via a series of postal questionnaires. Results: A five class LCA typology was constructed. Around 12% of the sample were classified as �hazardous drinkers� reporting frequent drinking, high levels of alcohol consumed, frequent binge drinking and multiple alcohol related problems. Multinomial logistic regression, with multiple imputation for missing data, was used to assess the covariates of adolescent drinking patterns. Hazardous drinking was associated with being white, being male, having heavy drinking parents (in particular fathers), smoking, illicit drug use, and minor and violent offending behaviour. Non-significant associations were found between drinking patterns and general mental health and attention deficient disorder. Conclusion: The latent class typology exhibited concurrent validity in terms of its ability to distinguish respondents across a number of alcohol and non-alcohol indicators. Notwithstanding a number of limitations, latent class analysis offers an alternative data reduction method for the construction of drinking typologies that addresses known weaknesses inherent in more tradition classification methods.

Using choice experiments to explore the spatial distribution of willingness to pay for rural landscape improvements

We report findings from a choice experiment survey designed to estimate the economic benefits of policy measures to improve the rural landscape in the Republic of Ireland. Using a panel mixed logit specification to account for unobserved taste heterogeneity we derived individual-specific willingness-to-pay (WTP) estimates for each respondent in the sample. We subsequently investigated the spatial dependence of these estimates. Results suggest the existence of positive spatial autocorrelation for all rural landscape attributes. As a means of benefit transfer, kriging methods were employed to interpolate WTP estimates across the whole of the Republic of Ireland. The kriged WTP surfaces confirm the existence of spatial dependence and illustrate the implied spatial variation and regional disparities in WTP for all the rural landscape improvements investigated.

Determinants of long-distance investing by business angels in the UK

The business angel market is usually identified as a local market, and the proximity of an investment has been shown to be key in the angel's investment preferences and an important filter at the screening stage of the investment decision. This is generally explained by the personal and localized networks used to identify potential investments, the hands-on involvement of the investor and the desire to minimize risk. However, a significant minority of investments are long distance. This paper is based on data from 373 investments made by 109 UK business angels. We classify the location of investments into three groups: local investments ( those made within the same county or in adjacent counties); intermediate investments ( those made in counties adjacent to the 'local' counties); and long-distance investments ( those made beyond this range). Using ordered logit analysis the paper develops and tests a number of hypotheses that relate long-distance investment to investment characteristics and investor characteristics. The paper concludes by drawing out the implications for entrepreneurs seeking business angel finance in investment-deficient regions, business angel networks seeking to match investors to entrepreneurs and firms ( which are normally their primary clients), and for policy-makers responsible for local and regional economic development.

Cheap and expensive alternatives in stated choice experiments: are they equally considered by respondents?

When analysing choice experiments respondents are assumed to attend all attributes and alternatives in the same way. However, because of the important role that the price of the alternatives can play in the decision-making process, the level of price of a specific alternative may have consequences on the level of consideration given to the remaining attributes of the alternative. In this article, we propose the use of a discrete mixtures logit approach to accommodate respondents ignoring alternatives in stated choice experiments. Our results indicate a higher propensity for respondents to ignore attributes when they face cheap rather than expensive alternatives. We also find that allowing for this leads to substantial improvements in the model performance.

Job strain and adverse health behaviors: The Finnish public sector study

Objective: The objective of this study was to explore the association between job strain and the co-occurrence of adverse health behaviors, smoking; heavy drinking; obesity, and physical inactivity. Methods. The authors studied cross-sectional data of 34,058 female and 8154 male public sector employees. Results: Multinomial logistic regression models adjusted for sex, age, basic education, marital status, and type of job contract showed that high job strain and passive jobs were associated with 1.3 to 1.4 times higher odds of having >= 3 (vs 0) adverse health behaviors. Among men, low job control was associated with a 1.3 fold likelihood and amon women active jobs were associated with a 1.2 fold likelihood of having >= 3 (vs 0) adverse behaviors. High demands were associated with a higher likelihood of co-occurrence of one to two (vs 0) adverse behav irs among women. Conclusions. b strain conditions may be associated with the co-occurrence of adverse health behaviors that contribute to preventable chronic diseases. Clinical Significance. Adversejob conditions may increase the likelihood of co-occurring health risk behaviors. Reducing work stress by increasingl ob control and decreasing psychologic demands might help efforts to promote healthy 1 festyles.