Working Papers

The WNE Working Papers series has been published by the Faculty of Economic Sciences at the University of Warsaw since 2008.

The WNE Working Papers series provides a fast, open channel for disseminating research conducted at the Faculty of Economic Sciences, University of Warsaw. The papers hosted here are working versions (pre-prints) and may evolve as authors refine their analyses, incorporate feedback, or progress through formal peer-review. What you read is the current version released by the authors, timestamped and assigned DOI/ISSN identifiers to ensure precise citation and version tracking. Copyright remains with the authors, who may, at any time, upload a revised file or add a note directing readers to a later, peer-reviewed publication.

The Working Papers series accepts articles by research employees of the Faculty and publications from conferences organised at the Faculty of Economic Sciences at the University of Warsaw. Articles should be original research papers which have not been previously published, on the subject of economics.

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Number of Results 3

WP(21/2018)280. Hybrid choice models vs. endogeneity of indicator variables: a Monte Carlo investigation

Authors: Budziński Wiktor, Czajkowski Mikołaj
We investigate the problem of endogeneity in the context of hybrid choice (integrated choice and latent variable) models. We first provide a thorough analysis of potential causes of endogeneity and propose a working taxonomy. We demonstrate that alth…

WP280. Hybrid choice models vs. endogeneity of indicator variables: a Monte Carlo investigation

We investigate the problem of endogeneity in the context of hybrid choice (integrated choice and latent variable) models. We first provide a thorough analysis of potential causes of endogeneity and propose a working taxonomy. We demonstrate that although it is widely believed that the hybrid choice framework is devoid of the endogeneity problem, there is no theoretical reason to expect that this is the case. We then demonstrate empirically that the problem exists in the hybrid choice framework too. By conducting a Monte Carlo experiment, we display the extent of the bias resulting from measurement and endogeneity biases. Finally, we propose two novel solutions to address the problem: by explicitly accounting for correlation between structural and discrete choice component error terms (or with random parameters in a utility function), or by introducing additional latent variables. Using simulated data, we demonstrate that these approaches work as expected, that is, they result in unbiased estimates of all model parameters.


DOI: http://doi.org.10.26405/WP/WNE/2018/280/021
Budziński Wiktor, Czajkowski Mikołaj
hybrid choice models endogeneity measurement bias attitudinal variables indicators

WP(8/2018)267. Environmental attitudes and place identity as simultaneous determinants of preferences for environmental goods

Authors: Faccioli Michela, Czajkowski Mikołaj, Glenk Klaus, Martin-Ortega Julia
Economic valuation is frequently employed to provide evidence of people's preferences for environmental goods. However, it is also often criticised for providing a simplified representation of preferences, with many factors that affect value form…

WP267. Environmental attitudes and place identity as simultaneous determinants of preferences for environmental goods

Economic valuation is frequently employed to provide evidence of people's preferences for environmental goods. However, it is also often criticised for providing a simplified representation of preferences, with many factors that affect value formation not accounted for. This is the case of environmental attitudes and especially place identity perceptions, which have been largely overlooked in economic valuation, despite representing amongst the most important drivers of people's behaviour towards the environment, according to the environmental psychology and sociology literature. To address this gap, we designed and conducted a choice experiment where we explored the simultaneous role of environmental attitudes and place identity perceptions on willingness to pay (WTP), taking peatland restoration in Scotland as a case study. This study adds to the existing literature in that no valuation study to date has simultaneously integrated both aspects in preference modelling. Given that both factors are potentially strong drivers of preferences, focusing only on one or the other provides a partial picture of the determinants of WTP. Moreover, we do not just look at 'generic' environmental attitudes, but also at 'specific' environmental attitudes. Our results, estimated through a novel and econometrically robust approach based on the hybrid choice model, show that people with more positive environmental attitudes and those who feel attached to Scotland and think that peatlands are an important part of Scotland's identity and landscape tend to display higher WTP. These findings are important to provide a richer understanding of the determinants of preferences for environmental goods. Our results also open up new insights to the discipline in relation to the spatial heterogeneity of preferences: we have shown that people do not only relate with the space around them by focusing on the distance to the improvement site, as most frequently postulated in valuation studies. The idea that place can be understood as a space with emotional and cultural meanings also plays a critical role in shaping preferences. All these are critical elements to better inform policy-makers in the design of more socially acceptable and effective environmental policies.


DOI: http://doi.org.10.26405/WP/WNE/2018/267/008
Faccioli Michela, Czajkowski Mikołaj, Glenk Klaus, Martin-Ortega Julia
environmental valuation discrete choice experiment environmental attitudes place identity hybrid choice models peatlands Scotland

WP(11/2017)240. Personality and Economic Choices

Authors: Boyce Christopher, Czajkowski Mikołaj, Hanley Nick
In this paper, we undertake the first examination of the effects of personality on individual economic choices over public environmental goods, using a stated preference approach. Based on three data sets from three separate choice modelling studies,…

WP240. Personality and Economic Choices

In this paper, we undertake the first examination of the effects of personality on individual economic choices over public environmental goods, using a stated preference approach. Based on three data sets from three separate choice modelling studies, we examine the effects of personality on preferences for the status quo, for changes in environmental quality, and over the costs of investing in environmental improvement. Using a hybrid choice framework, we show that incorporating personality research into economic models can provide valuable behavioural insights, enriching explanations of why the demand for environmental goods varies across people.


DOI: https://doi.org/10.26405/WP/WNE/2017/240/011
Boyce Christopher, Czajkowski Mikołaj, Hanley Nick
personality preference heterogeneity hybrid choice models stated preferences choice models
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