Implications of heterogeneity in discrete choice analysis

This dissertation carries out a series of Monte Carlo simulations seeking the implications for welfare estimates from three research practices commonly implemented in empirical applications of mixed logit and latent class logit. Chapter 3 compares welfare measures across conditional logit, mixed logit, and latent class logit. The practice of comparing welfare estimates is widely used in the field. However, this chapter shows comparisons of welfare estimates seem unable to provide reliable information about the differences in welfare estimates that result from controlling for unobserved heterogeneity. The reason is that estimates from mixed logit and latent class logit are inherently inecient and inaccurate. Researchers tend to use their own judgement to select the number of classes of a latent class logit. Chapter 4 studies the reliability of welfare estimates obtained under two scenarios for which an empirical researcher using his/her judgement would arguably choose less classes than the true number of classes. Results show that models with a number of classes smaller than the true number tend to yield down- ward biased and inaccurate estimates. The latent class logit with the true number of classes always yield unbiased estimates but their accuracy may be worse than models with the smaller number of classes. Studies implementing discrete choice experiments commonly obtain estimates of preference parameters from latent class logit models. This practice, however, implies a mismatch: discrete choice experiments are designed under the assumption of homogeneity in preferences, and latent class logit search for heterogeneous preferences. Chapter 5 studies whether welfare estimates are robust to this mismatch. This chapter checks whether the number of choice tasks impact the reliability of welfare estimates. The findings show welfare estimates are unbiased regardless the number of choice tasks, and their accuracy increases with the number of choice tasks. However, some of the welfare estimates are inefficient to the point that cannot be statistically distinguished from zero, regardless the number of choice tasks. Implications from these findings for the empirical literature are discussed

Governance of urban green spaces across Latin America - insights from semi-structured interviews to managers amid COVID-19

The COVID-19 pandemic has brought unprecedented challenges to managers of urban green spaces. As suggested by findings from 18 structured interviews from six Latin American countries reported in this paper, managers in Latin America have not been able to take the most advantage of available green space during the COVID-19 lockdown. At the core of this inability is a governance characterized by dependence on political will, lack of continuity due the nonexistence of civil service, limited autonomy, insufficient budgets, absence of formal paths to fund themselves, shortage of technical know-how, and insufficient citizens’ involvement. Thus, while a criticism to management of urban green spaces in developed cities is its focus on recreational services —with no attention to other ecosystem services—, management in Latin America is heavily constrained by funds that barely afford maintenance of basic infrastructure —with exceptions that we highlight in the manuscript. Consequently, managers of urban green spaces across Latin America have not successfully implemented adaptation measures that, for instance, European counterparts have —e.g. traffic management, information campaigns. In addition, these governance capabilities pose the risk of maladaptation. For instance, many managers in Latin America have formally resorted to a full closure of their premises during the COVID-19 lockdown but they have not successfully enforced such a closure, which likely has brought undesirable effects —e.g. more overcrowding than under a controlled no-closure scenario. We provide public policy recommendations, and a list of research questions specific to Latin America —an understudied region when it comes to both governance of urban green spaces, and the role of urban green spaces during the COVID-19 pandemic

Stated Willingness to Pay for Residential Renewable Electricity and Green Jobs in Aguascalientes, Mexico

Via a discrete choice experiment, this paper documents that residential electricity consumers in Aguascalientes, Mexico, are willing to pay a premium for renewable energies as well as for the creation of green jobs. These results are particularly timely because the current Federal administration has redirected priorities from an energy transition that was expected to boost renewable energies to the pursuing of energy sovereignty. Concerns regarding this prioritization have been raised by national and international stakeholders due to its potential economic inefficiency and its implications for the achievement of climate change goals. These concerns have only intensified as discussions begin on how Mexico should face the post-coronavirus recession. This paper’s findings open the door to discuss whether a combination of a just energy transition together with the boosting of renewable energies should be part of a strategy to reach energy sovereignty at the same time that Mexico deals with a post-coronavirus world

Value of co-benefits from energy saving ventilation systems –Contingent valuations on Swiss home owners

Previous efforts exploring options to increase residential sector’s energy efficiency have overlooked that highlighting co-benefits associated with energy efficiency may represent a promising strategy to draw attention from decision makers. For instance, in addition to savings in energy costs, buildings equipped with energy saving and comfort ventilation (ESV) system provide co-benefits such as improved indoor air quality (IAQ), thermal comfort, and noise reduction. These co-benefits are attributes of an experience goods as their value is difficult to appraise unless they have been experienced. This paper estimates the value of these co-benefits by inquiring willingness to accept (WTA) compensation to hold off on using ESV from Swiss owners of Minergie houses, which are equipped with ESV. Average monthly WTA is CHF 181 —value dominated by IAQ. WTA protocols may deliver overestimated values. Thus this paper estimates willingness to pay (WTP) on a sample of owners of conventional houses —i.e. respondents that have not experienced an ESV. Average monthly WTP is CHF 163 —value dominated by presence of allergies at home, an approximation to relevance of IAQ among respondents that have not experienced ESV. A back-of-the-envelope cost-benefit analysis informed with our estimates suggests that monthly benefits from ESV can be as much as twice the costs

Small-scale farmers’ willingness to adopt chemical-free inputs and engage in collaborative arrangements –A discrete choice experiment in Central Mexico

Objetive: Explore small-scale Mexican farmers’ willingness to adopt chemical-free fertilizers and pesticides, and to engage in two collaborative arrangements. Methodology: A discrete choice experiment has been designed based on two non-monetary attributes (use/no use of chemical inputs and two collaborative arrangements) and a monetary attribute (percentage change in price of crop that generates most of net revenues). Data has been analyzed with a two-class latent class logit specification. Findings: 60% of respondents is not willing to transition to a chemical-free input regime, is willing to receive management support from municipality, and is not interested in a shared insurance. On the opposite side of the preferences, 40% of respondents is willing to adopt chemical-free inputs, is not interested in management support, and is willing to participate in a shared insurance. Limitations: Our sample is not nationally representative, and further studies are needed to corroborate and generalize our findings. Contribution: This is the first study exploring whether preferences of small-scale farmers in Mexico align with Federal government’s goal of phasing out glyphosate. Conclusions: With 40% of small-scale farmers willing to adopt chemical-free inputs, if the Federal government wants to convice the other 60% of phasing out glyphosate, a possibility is to implement a slower strategy that starts with providing management support. Once management support is in place, and trust is gained, doors may open for a transition to chemical-free production regimes

Dairy farmers’ willingness to adopt cleaner production practices for water conservation: A discrete choice experiment in Mejia, Ecuador

Worldwide, farming practices directly impact the quality and quantity of both underground and surface water resources. In Mejia, the leading milk-producing region of Ecuador, the adoption rate of conservation practices among farmers is low despite price incentives established by the Agricultural Ministry. Our discrete choice experiment documents stated preferences for water conservation practices of Mejia’s dairy farmers by facing respondents to alternatives described in terms of water-efficient technologies, management of manure and solid waste, and training to resolve conflicts over water use. Estimates derived from our preferred random parameter logit specification imply that the average willingness to pay (WTP) for a solid rain irrigation system is US$147 ha-1; and US$212 ha-1 for training to resolve conflicts. In addition, we report heterogeneity in WTP estimates. These findings can assist in the resolution of current issues in Mejia, including inefficient water irrigation and weak water governance system. Based on our results and the context of our study area, we suggest, first, the adoption of a cost-sharing scheme (given that the WTP for these practices does not cover their implementation cost), and second, the participation of academic institutions to help these water users resolve conflicts, establish their own rules, and improve water governance

Structural Equation Modeling as a Route to Inform Sustainable Policies: The Case of Private Transportation

The availability of big data allows a wide range of predictive analyses that could inform policies for promoting sustainable behaviors. While providing great predictive power, adopted models fall short in explaining the underlying mechanisms of behavior. However, predictive analyses can be enhanced by complementary theory-based inferential analyses, guiding tailored policy design to focus on relevant response mechanisms. This paper illustrates the complementary value of multidisciplinary inferential models in informing large predictive models. We focus on Structural Equation Modeling, an approach suitable for a holistic examination of different pathways and hypotheses from multiple disciplines. Drawing on an interdisciplinary theoretical framework we develop an empirically tractable model and apply it to a sample of household data from Switzerland. The model focuses on the relationships that delineate the underlying mechanisms for energy consumption behaviors in the case of private transportation. The results are discussed in light of possible contributions to policies aiming at the promotion of sustainable travel behavior as well as data requirements for analyses relying on big data

Value of co-benefits from energy saving ventilation systems : contingent valuations on Swiss home owners

In Copyright - Non-Commercial Use Permitted. http://rightsstatements.org/page/InC-NC/1.0/Previous efforts exploring options to increase residential sector’s energy efficiency have overlooked that highlighting co-benefits associated with energy efficiency may represent a promising strategy to draw attention from decision makers. For instance, in addition to savings in energy costs, buildings equipped with energy saving and comfort ventilation (ESV) system provide co-benefits such as improved indoor air quality (IAQ), thermal comfort, and noise reduction. These co-benefits are attributes of an experience goods as their value is difficult to appraise unless they have been experienced. This paper estimates the value of these co-benefits by inquiring willingness to accept (WTA) compensation to hold off on using ESV from Swiss owners of Minergie houses, which are equipped with ESV. Average monthly WTA is CHF 181 —value dominated by IAQ. WTA protocols may deliver overestimated values. Thus this paper estimates willingness to pay (WTP) on a sample of owners of conventional houses —i.e. respondents that have not experienced an ESV. Average monthly WTP is CHF 163 —value dominated by presence of allergies at home, an approximation to relevance of IAQ among respondents that have not experienced ESV. A back-of-the-envelope cost-benefit analysis informed with our estimates suggests that monthly benefits from ESV can be as much as twice the costs

Stated benefits from urban afforestation in an arid city: a contingent valuation in Mexicali, Baja California, Mexico

The pervasiveness of particulate matter in arid cities has yet to be discussed and tackled. Given that urban trees have been documented to provide air-filtering and dry deposition services, this study documents the stated benefits from an urban afforestation scenario in Mexicali –an arid city located northwest Mexico at the US-Mexico border. Our doublebounded dichotomous contingent valuation protocol yields an estimated average annual willingness to pay (WTP) of USD 88 per household. Variations in the WTP are associated with perception of air quality and presence of respiratory symptoms in the respondent’s household. The smallest WTP (USD 75) is reported by respondents perceiving poor air quality in their neighborhood and with no household members affected by respiratory symptoms. In contrast, respondents perceiving good air quality and with at least one household member facing respiratory symptoms reported a WTP of USD 99. The average stated benefits represent around 0.8% of the annual household income