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 8

WP(5/2022)381. Do numerical probabilities promote informed stated preference responses under inherent uncertainty? Insight from a coastal adaptation choice experiment

Authors: Makriyannis Christos, Johnston Robert J., Zawojska Ewa
Inherent outcome uncertainty within stated preference surveys is invariant across valuation scenarios. It has received relatively little attention in the environmental stated preference literature. Specifically, it is unknown whether percentage proba…

WP381. Do numerical probabilities promote informed stated preference responses under inherent uncertainty? Insight from a coastal adaptation choice experiment

Inherent outcome uncertainty within stated preference surveys is invariant across valuation scenarios. It has received relatively little attention in the environmental stated preference literature. Specifically, it is unknown whether percentage probabilities—a ubiquitous means of communicating uncertainty in questionnaires—are an effective risk communication tool. This article systematically evaluates two treatments in a discrete choice experiment survey related to coastal climate change adaptation in Connecticut, USA: one provides only raw frequencies as a risk communication tool, while the other provides implied numerical probabilities in addition to the same raw frequencies. Results from a mixed logit model and from a latent class model that controls for sociodemographic influences show that the use of percentage probabilities to communicate inherent uncertainty has no additional effect on average welfare estimates or the choice behavior of respondents. Our findings suggest that percentage probabilities may not be an impactful way to communicate inherent uncertainty in environmental stated preference questionnaires.


Makriyannis Christos, Johnston Robert J., Zawojska Ewa
flood adaptation inherent uncertainty discrete choice experiment stated preference mixed logit risk communication WTP-space

WP(14/2021)362. Privacy trade-offs in the ride-hailing services

Authors: Paliński Michał
We test for users readiness for co-financing ride-hailing service with their personal data applying a Discrete Choice Experiment. We design an experiment in which respondents are asked to choose between hypothetical app-based taxi rides which offered…

WP362. Privacy trade-offs in the ride-hailing services

We test for users readiness for co-financing ride-hailing service with their personal data applying a Discrete Choice Experiment. We design an experiment in which respondents are asked to choose between hypothetical app-based taxi rides which offered discounts as a compensation for intruding their privacy and a regular service. Our analysis compare how awareness of rights stemming from GDPR affects respondent's privacy preferences. Cross-group analysis indicate that reminding users about their rights stemming from the GDPR significantly increases their valuation of personal data. The results of WTA analysis suggest that there is a market for "pay with your data" business models.


Paliński Michał
economics of privacy mobile apps DCE mixed logit WTA

WP(18/2017)247. Simulation error in maximum likelihood estimation of discrete choice models

Authors: Czajkowski Mikołaj, Budziński Wiktor
Maximum simulated likelihood is the preferred estimator of most researchers who deal with discrete choice. It allows estimation of models such as mixed multinomial logit (MXL), generalized multinomial logit, or hybrid choice models, which have now be…

WP247. Simulation error in maximum likelihood estimation of discrete choice models

Maximum simulated likelihood is the preferred estimator of most researchers who deal with discrete choice. It allows estimation of models such as mixed multinomial logit (MXL), generalized multinomial logit, or hybrid choice models, which have now become the state-of-practice in the microeconometric analysis of discrete choice data. All these models require simulation-based solving of multidimensional integrals, which can lead to several numerical problems. In this study, we focus on one of these problems – utilizing from 100 to 1,000,000 draws, we investigate the extent of the simulation bias resulting from using several different types of draws: (1) pseudo random numbers, (2) modified Latin hypercube sampling, (3) randomized scrambled Halton sequence, and (4) randomized scrambled Sobol sequence. Each estimation is repeated up to 1,000 times. The simulations use several artificial datasets based on an MXL data generating process with different numbers of individuals (400, 800, 1200), different numbers of choice tasks per respondent (4, 8, 12) and different experimental designs (D-optimal, D-efficient for the MNL and D-efficient for the MXL model). Our large-scale simulation study allows for comparisons and drawing conclusions with respect to (1) how efficient different types of quasi Monte Carlo simulation methods are and (2) how many draws one should use to make sure the results are of "satisfying" quality – under different experimental conditions. Our study is the first to date to offer such a comprehensive comparison.


DOI: https://doi.org/10.26405/WP/WNE/2017/247/018
Czajkowski Mikołaj, Budziński Wiktor
discrete choice mixed logit simulated maximum log-likelihood function simulation error draws quasi Monte Carlo methods MLHS Halton Sobol number of draws

WP(17/2017)246. How much consumers value on-line privacy? Welfare assessment of new data protection regulation (GDPR)

Authors: Sobolewski Maciej, Paliński Michał
Our paper analyses upcoming personal data protection reform in the EU from the perspective of user preferences. Our aim is to estimate monetary valuation of the core instruments envisaged in the General Data Protection Regulation and assess potential…

WP246. How much consumers value on-line privacy? Welfare assessment of new data protection regulation (GDPR)

Our paper analyses upcoming personal data protection reform in the EU from the perspective of user preferences. Our aim is to estimate monetary valuation of the core instruments envisaged in the General Data Protection Regulation and assess potential welfare gain from this policy intervention. On methodological grounds, we utilize stated preference discrete choice experiment. Our final dataset consisted of 4390 choices made by 143 respondents. We used these data to estimate the mixed logit model. Our study for the first time analyses the broader spectrum of privacy control mechanisms and provides estimates of welfare gain from policy intervention in privacy domain. By taking this perspective we fill a gap in literature and provide insights into users' preferences towards particular instruments, such as right to be forgotten, right to object profiling and personal data portability. The main finding from the analysis is that implementation of enhanced privacy control mechanisms will generate positive welfare effect. The size of estimated welfare gain from policy intervention of the same scope as GDPR amounts to 6.5 EUR per capita monthly. This result proves that there is a 'demand' for privacy reform driven by both concerns related to disclosing personal data as well as shortage of effective tools for privacy management.


DOI: https://doi.org/10.26405/WP/WNE/2017/246/017
Sobolewski Maciej, Paliński Michał
personal data management e-privacy General Data Protection Regulation mixed logit

WP(30/2016)221. Linking perceived choice complexity with scale heterogeneity in discrete choice experiments: home heating in Finland

Authors: Ruokamo Enni, Czajkowski Mikołaj, Hanley Nick, Juutinen Artti, Svento Rauli
Choosing a specific heating system is a complex and difficult decision for homeowners as there exists a wide array of heating technologies with different characteristics that one can consider before purchasing. We include multiple heating technologie…

WP221. Linking perceived choice complexity with scale heterogeneity in discrete choice experiments: home heating in Finland

Choosing a specific heating system is a complex and difficult decision for homeowners as there exists a wide array of heating technologies with different characteristics that one can consider before purchasing. We include multiple heating technologies and attributes in our Choice Experiment design and explore the effect of perceived choice complexity on the randomness of choices. In particular, we investigate how different self-evaluated factors of choice complexity affect mean scale and scale variance. Our findings suggest that perceived choice complexity has a systematic impact on the parameters of econometric models of choice. However, there are differences between alternative self-evaluated complexity-related covariates. Results indicate that individuals who report that answering the choice tasks was difficult have less deterministic choices. Perceptions of the realism of home heating choice options also affect scale and scale variance.


Ruokamo Enni, Czajkowski Mikołaj, Hanley Nick, Juutinen Artti, Svento Rauli
Home heating Choice experiment Choice modelling Scale heterogeneity Generalized mixed logit Complexity

WP(17/2016)208. Using geographically weighted choice models to account for spatial heterogeneity of preferences

Authors: Budziński Wiktor, Campbell Danny, Czajkowski Mikołaj, Demšar Urška, Hanley Nick
In this paper we investigate the prospects of using geographically weighted choice models for modelling of spatially clustered preferences. The data used in this study comes from a discrete choice experiment survey regarding public preferences for th…

WP208. Using geographically weighted choice models to account for spatial heterogeneity of preferences

In this paper we investigate the prospects of using geographically weighted choice models for modelling of spatially clustered preferences. The data used in this study comes from a discrete choice experiment survey regarding public preferences for the implementation of a new country-wide forest management and protection program in Poland. We combine it with high-resolution geographical information system data related to local forest characteristics. Using locally estimated discrete choice models we obtain location-specific estimates of willingness to pay (WTP). Variation in these estimates is explained by the socio-demographic characteristics of respondents and characteristics of the forests in their place of residence. The results are compared with those obtained from a more typical, two stage procedure which uses Bayesian posterior means of the mixed logit model random parameters to calculate individual-specific estimates of WTP. The latter approach, although easier to implement and more common in the literature, does not explicitly assume any spatial relationship between individuals. In contrast, the geographically weighted approach differs in this aspect and can provide additional insight on spatial patterns of individuals’ preferences. Our study shows that although the geographically weighted discrete choice models have some advantages, it is not without drawbacks, such as the difficulty and subjectivity in choosing an appropriate bandwidth. We find a number of notable differences in WTP estimates and their spatial distributions. At the current level of development of the two techniques, we find mixed evidence on which approach gives the better results.


Budziński Wiktor, Campbell Danny, Czajkowski Mikołaj, Demšar Urška, Hanley Nick
discrete choice experiment contingent valuation willingness to pay spatial heterogeneity of preferences forest management passive protection litter tourist infrastructure mixed logit geographically weighted model weighted maximum likelihood local maximum likelihood

WP(31/2015)179. Addressing empirical challenges related to the incentive compatibility of stated preference methods

Authors: Czajkowski Mikołaj, Vossler Christian A., Budziński Wiktor, Wiśniewska Aleksandra, Zawojska Ewa
An emerging theoretical literature focused on the incentive compatibility of stated preference surveys offers a new lens through which to view extant evidence on external validity, and provides guidance for practitioners. However, critical theoretica…

WP179. Addressing empirical challenges related to the incentive compatibility of stated preference methods

An emerging theoretical literature focused on the incentive compatibility of stated preference surveys offers a new lens through which to view extant evidence on external validity, and provides guidance for practitioners. However, critical theoretical assumptions rest on latent respondent beliefs, such as the belief that respondents view surveys as potentially influencing policy (i.e., policy consequentiality), which gives rise to pressing empirical challenges. In this study, we develop a Hybrid Mixed Logit model capable of integrating multiple latent beliefs, and subjective measures of these beliefs, into discrete choice models of stated preferences. Further, we provide a split-sample test of the effects of exogenous information signals related to policy consequentiality. Our results suggest some potential for researchers to induce desired beliefs through simple information signals and, importantly, that latent beliefs and information signals significantly influence elicited willingness to pay.


Czajkowski Mikołaj, Vossler Christian A., Budziński Wiktor, Wiśniewska Aleksandra, Zawojska Ewa
discrete choice experiment stated preferences consequentiality field experiment hybrid mixed logit model

WP(6/2015)154. Spatial heterogeneity of willingness to pay for forest management

Authors: Czajkowski Mikołaj, Budziński Wiktor, Campbell Danny, Giergiczny Marek, Hanley Nick
The paper investigates spatial heterogeneity of the public’s preferences for the implementation of a new country-wide forest management and protection program in Poland. Spatial econometric methods and high resolution geographical information s…

WP154. Spatial heterogeneity of willingness to pay for forest management

The paper investigates spatial heterogeneity of the public’s preferences for the implementation of a new country-wide forest management and protection program in Poland. Spatial econometric methods and high resolution geographical information system (GIS) data related to forest characteristics are used to explain individual-specific willingness to pay (WTP) values, derived from a discrete choice experiment (DCE) study. We find that respondents’ WTP is higher the closer they live to their nearest forest, and the scarcer forests are in the area where they live. Interestingly, the more highly ecologically valuable forests in respondents’ area, the more they prefer extending areas of national forest protection. In addition, we investigate spatial patterns in individual-specific WTP scores and in latent class membership probabilities, finding that preferences are indeed spatially clustered. We argue that this clustering should be taken into account in both benefits analysis and policy-making.


Czajkowski Mikołaj, Budziński Wiktor, Campbell Danny, Giergiczny Marek, Hanley Nick
discrete choice experiment contingent valuation willingness to pay spatial heterogeneity of preferences forest management passive protection litter tourist infrastructure mixed logit Kriging spatial-lag
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