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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(1) the main text without the title of the article and the authors (DOC/DOCX file) and

(2) the title page including: the title of the paper, the authors and their affiliation (DOC/DOCX file).

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Number of Results 4

WP(4/2018)263. A New Baseline Model for Estimating Willingness to Pay from Discrete Choice Models

Authors: Carson Richard T., Czajkowski Mikołaj
We show a substantive problem exists with the widely-used ratio of coefficients approach to calculating willingness to pay (WTP) from choice models. The correctly calculated standard error for WTP using this approach is shown to always be infinity. A…

WP263. A New Baseline Model for Estimating Willingness to Pay from Discrete Choice Models

We show a substantive problem exists with the widely-used ratio of coefficients approach to calculating willingness to pay (WTP) from choice models. The correctly calculated standard error for WTP using this approach is shown to always be infinity. A variant of this problem has long been recognized for mixed logit models. We show it occurs even in simple models like the conditional logit used as a baseline reference specification. It occurs because the standard error for the cost parameter implies some possibility that the true parameter value is arbitrarily close to zero. We propose a simple yet elegant way to overcome this problem by reparameterizing the coefficient of the (negative) cost variable to enforce the theoretically correct (and empirically almost always found) positive coefficient using an exponential transformation of the original parameter. This reparameterization enforces the desired restriction that no-part of the confidence region for original cost parameter spans zero. With it the confidence interval for WTP is now finite and well behaved. Our proposed model is straightforward to implement using readily available software. Its log-likelihood value is the same as the usual baseline discrete choice model and we recommend its use as the new standard baseline reference model.


DOI: http://doi.org.10.26405/WP/WNE/2018/263/004
Carson Richard T., Czajkowski Mikołaj
conditional logit confidence intervals contingent valuation delta method discrete choice experiment Krinsky-Robb multinomial logit probit welfare measures

WP(29/2013)114. Switching Costs and Network Effects - How Much Do they Really Matter in Mobile Telecommunications?

Authors: Czajkowski Mikołaj, Sobolewski Maciej
Our study focuses on the identification and the measurement of switching costs and network effects in mobile telecommunications. Although these two phenomena create similar consumer lock-in mechanisms, there are no empirical studies that integrate th…

WP114. Switching Costs and Network Effects - How Much Do they Really Matter in Mobile Telecommunications?

Our study focuses on the identification and the measurement of switching costs and network effects in mobile telecommunications. Although these two phenomena create similar consumer lock-in mechanisms, there are no empirical studies that integrate them into one model of subscriber's behavior. Our study fills this gap by applying stated preference valuation methods to a representative sample of individual mobile phone users in Poland. We find that number portability can be attributed to only approximately 50% of the total switching costs associated with changing either the provider or the service and the remaining part is associated with status quo inertia. Additionally, we show that because network effects play an important role in service valuation, they lead to strengthening the lock-in mechanisms even further. Our study provides the first empirical measurements of the relative importance of these simultaneous effects and provides the estimates of their monetary value.


Czajkowski Mikołaj, Sobolewski Maciej
Switching costs network effects mobile telecommunications mobile number portability brand valuation stated preference non-market valuation discrete choice experiment random parameters multinomial logit model

WP(5/2013)90. Providing Preference-Based Support for Forest Ecosystem Service Management in Poland

Authors: Czajkowski Mikołaj, Bartczak Anna, Giergiczny Marek, Stale Navrud, Żylicz Tomasz
The paper looks at people's preferences for the changes in selected ecosystem services resulting from new management strategies of forest areas in Poland. It applies a generalized multinomial logit (G-MNL) model to interpret the results of a disc…

WP90. Providing Preference-Based Support for Forest Ecosystem Service Management in Poland

The paper looks at people's preferences for the changes in selected ecosystem services resulting from new management strategies of forest areas in Poland. It applies a generalized multinomial logit (G-MNL) model to interpret the results of a discrete choice experiment (DCE) study administered to a representative sample of 1001 Poles. The questionnaire included three physical attributes, namely: protecting the most ecologically valuable forest ecosystems, reducing litter in forests, and improving recreation infrastructure. The selection of these attributes was motivated by extensive qualitative research of what indicators of biodiversity, nature protection and recreation possibilities people are the most sensitive to. The fourth attribute was monetary - additional cost of the new programs which would have to be financed out of increased taxes. The results allowed for a robust estimation of implicit prices of the choice attributes and calculating welfare measures of specific forest management scenarios. In addition, the study revealed interesting connections between respondents' current forest recreation patterns and the importance they place on different attributes of forests. The results make it possible to utilize respondents' preference heterogeneity, to a large extent determined by their current recreational use patterns, in designing future forest management strategies.


Czajkowski Mikołaj, Bartczak Anna, Giergiczny Marek, Stale Navrud, Żylicz Tomasz
Biodiversity forest recreation discrete choice modeling generalized multinomial logit model

WP(15/2012)81. The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Goods

Authors: Czajkowski Mikołaj, Hanley Nick, LaRiviere Jacob
This paper develops a model of demand estimation in which consumers learn about their true preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the …

WP81. The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Goods

This paper develops a model of demand estimation in which consumers learn about their true preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two quasi-public goods. We find that the predictions of the theoretical exercise that additional experience with a good will make consumers more certain over their preferences in both mean and variance are supported in each case.


Czajkowski Mikołaj, Hanley Nick, LaRiviere Jacob
Bayesian demand estimation stated preference generalized multinomial logit scale scale variance
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