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Choice modeling and the brain : a study on the electroencephalogram (EEG) of preferences
No full textEighteen participants were recruited to perform the experiments with the average results showing clear and significant change in the spectral activity in the frontal (F3 and F4), parietal (P7 and P8) and occipital (O1 and O2) areas while the participants were indicating their preferences. The results show that, when considering the amount of information exchange between the left and right hemispheres, theta bands exhibited minimal redundancy and maximum relevance to the task at hand when extracted from symmetric frontal, parietal, and occipital regions while alpha dominated in the frontal and parietal regions and beta dominating mainly in the occipital and temporal regions.
A cautionary note on designing discrete choice experiments : a comment on Lusk and Norwood's "Effect of experiment design on choice-based conjoint valuation estimates"
No full textRecent Monte Carlo work on choosing experimental designs for discrete choice experiments seemed to greatly simplify this choice for applied researchers. It suggested that (a) commonly used designs can generate unbiased estimates for indirect utility function specifications with main effects only and main effects plus higher order terms, and (b) random designs are more efficient than main effects designs. We show that these results are very specific to the particular indirect utility specifications studied and do not generalize well. We further show that conclusions drawn concerning random designs are problematic and potentially dangerous for applied researchers.
Formal choice models of informal choices : what choice modeling research can (and can't) learn from behavioral theory
No full textIn this paper we illustrate the benefits of forging a better alliance among behavioral, economic, and statistical approaches to modeling consumer choice behavior. We focus on the problems that arise when building descriptive models of choice in evolving markets, where consumers are likely to have poorly developed preferences and be influenced by beliefs about future market changes. We illustrate how understanding the actual process that is driving preferences can provide analysts with both better a priori insights into the model structures that are likely to provide the best descriptive account of choices in such settings, as well as how stable these structures are likely to be over time. We show, for example, that analogical reasoning heuristics—a common strategy for making decisions under preference uncertainty—can produce choice patterns that resemble the output of complex nonlinear, nonadditive, multi-attribute utility rules. Likewise, because novice consumers are likely to display strong individual differences in the variance of unobserved components of utility, methods that fail to recognize such differences will tend to overstate the actual extent of taste heterogeneity that exists in a population. We also illustrate the benefits of a reverse dialogue, examining how economic theory can lead behavioral researchers to more parsimonious explanations for apparent anomalies in choice tasks where preferences are uncertain. We show, for example, that some ad hoc models that have been used to statistically describe the compromise effect in choice can be deduced from first principles of rational risky decision making.
Emotions and decision rules in discrete choice experiments for valuing health care programmes for the elderly
No full textThe evaluation of health care programmes is commonly approached with stated preference methods such as contingent valuation or discrete choice experiments. These methods provide useful information for policy decisions involving health regulations and infrastructures for health care. However, econometric modelling of these data usually relies on a number of maintained assumptions, such as the use of the compensatory or random utility maximization rule. On the other hand, health policy issues can raise emotional concerns among individuals, which might induce other types of choice behaviour. In this paper we consider potential deviations from the general compensatory rule, and how these deviations might be explained by the emotional state of the subject. We utilized a mixture econometric model which allows for various potential decisions rules within the sample, such as the complete ignorance, conjunctive rule and satisfactory rules. The results show that deviations from the full linear compensatory decision rule are predominant, but they are significantly less observed for those subjects with a medium emotional state about the issue of caring for the health state of the elderly. The implication is that the emotional impact of health policy issues should be taken into account when making assumptions of individual choice behaviour in health valuation methods.
Discounting behavior and environmental decisions
No full textDiscounting plays a major role in the life cycle of environmental and natural resource policies. Evaluating centuries-scale problems like climate change with standard discount rates yields results that many find ethically unacceptable. Paradoxes abound. Low discount rates are urged for determining the net benefits of climate change, while households fail to undertake energy conservation actions that have payback periods of only a few years. Efforts to uncover discount rates from revealed and stated preferences suggest that a variety of confounding factors may be simultaneously in play. Common property resources provide an example of how market failures can lead to behavior consistent with extreme discounting that can be addressed through effective policy. Finally, politicians who make ultimate policy decisions may have incentives to act in accordance with discount rates not socially optimal.
Construction of experimental designs for mixed logit models allowing for correlation across choice observations
No full textIn each stated choice (SC) survey, there is an underlying experimental design from which the hypothetical choice situations are determined. These designs are constructed by the analyst, with several different ways of constructing these designs having been proposed in the past. Recently, there has been a move from so-called orthogonal designs to more efficient designs. Efficient designs optimize the design such that the data will lead to more reliable parameter estimates for the model under consideration. The main focus has been on the multinomial logit model, however this model is unable to take the dependency between choice situations into account, while in a stated choice survey usually multiple choice situations are presented to a single respondent. In this paper, we extend the literature by focusing on the panel mixed logit (ML) model with random parameters, which can take the above mentioned dependency into account. In deriving the analytical asymptotic variance-covariance matrix for the panel ML model, used to determine the efficiency of a design, we show that it is far more complex than the cross-sectional ML model (assuming independent choice observations). Case studies illustrate that it matters for which model the design is optimized, and that it seems that a panel ML model SC experiment needs less respondents than a cross-sectional ML experiment for the same level of reliability of the parameter estimates.
Developing an index of capability for older people : a new form of measure for public health interventions?
No full textThe evolution of business models for non-major desalination plants in Australia - issues for governance
No full textSeawater desalination is increasingly considered as an important component of the water resources mix required to address the growing demand for water in situations where there is limited fresh water availability. Australia has made heavy investments over the past five years in desalination technology mostly to augment water supplies to the coastal capital cities by building six large desalination plants. In addition to these large plants, there are numerous non-major plants delivering desalinated water to several remote communities. The prolonged drought observed from 2000 to 2006 and impetus for private sector participation in infrastructure development and public service delivery including water supply, resulted in an increase in the numbers of these plants. However, there is very little or no information about these plants. Furthermore private sector involvement in the water supply industry has resulted in a range of business models including desalination industry in Australia. Accordingly the purpose of this paper is to identify the non-major desalination plants in Australia and the different business arrangements under which they operate. This work is part of an ongoing research project funded by the National Centre for Excellence in Desalination Australia (NCEDA) and it presents preliminary findings of the first phase of the project. The data was collected using online desk research and an innovative commercial in confidence snowballing technique. This study identified 666 non-major desalination plants with various business models. Out of the 666 plants identified 382 plants are currently operating and the results presented here are related to these plants. Next phase of the research will further explore all the ‘unknowns’ in order to obtain a good understanding of the different delivery methods, and potentially identifying the most likely method(s) to best deliver value for money and protect public interest.
Speaker's Box: Advertisements Just Aren't Advertisements Anymore: A New Typology for Evolving Forms of Online "Advertising"
No full textFor this Speaker’s Box, we’ve asked three researchers and thought leaders for their views on the need for a more standardized typology for Internet advertising: Dr. Colin Campbell is a researcher who examines consumer-generated advertising, social media, and consumer engagement. In particular, he has a research and teaching interest in how the Internet affects consumer response to online advertising. Dr. Justin Cohen’s background with the Ehrenberg-Bass Institute brings a strong industry focus. Dr. Junzhao Ma completes the trio with his experience as—and insight into—big-data marketing analysis and research. In the words that follow, Drs. Campbell, Cohen, and Ma pool their intellectual-capital resources to explain the rationale for standardizing Internet advertising terminology and provide a number of useful best-practice examples. Douglas West Professor of Marketing, King’s College London Executive Editor, Journal of Advertising Research
Transmission and reflection through 1D metallo-dielectric gratings of real metals under sub-wavelength condition
No full textUnder the sub-wavelength condition (w<λ/2)(w<λ/2), an analytical model of light transmission and reflection through 1D metallo-dielectric gratings of real metals has been developed. It has been shown that the transmission intensity associated with the Fabry–Perot (FP) resonance of a 1D metallo-dielectric grating of a real metal decreases with the increasing grating thickness and the dielectric constant of the ridge material. Further, it has been demonstrated that the intensity of the FP resonance increases with the increasing slit width while it is independent of the grating period (P ) and the incidence angle (when P⪡λP⪡λ). Analytical model developed in this paper can be useful in the design of 1D metallo-dielectric gratings based extraordinary optical transmission devices.