This thesis comprises three principal essays, each of which provides a contribution to the literature on the nonparametric approach to demand analysis. In each essay, I develop novel techniques that follow in the revealed preference tradition, and apply them to tackle a series of questions that concern the mechanisms underlying consumer spending decisions. Each technique developed is tightly linked to a particular nonparametric theory of choice behaviour and is explicitly designed for use with a finite set of observations. My work draws heavily upon results from finite mathematics, into which I integrate insights from information theory and integer programming. The output of this endeavor is a set of methodologies that are largely free of auxiliary assumptions over the form of the unobserved structural functions of interest. Providing greater detail on the work to come, my first essay extends and clarifies the nonparametric approach to forecasting demand behaviour at new budget regimes. Using insights from information theory and integer programming, I construct an operational nonparametric definition of global rationality and develop a methodology that facilitates the recovery of globally rational individual demand predictions. This is the first attempt in the literature to develop a systematic methodology to impose global rationality on nonparametric demand predictions. The resulting forecasts allow for unrestricted preference heterogeneity in the population and I demonstrate how these predictions can be used for coherent welfare analysis. In my second and third essays, I prove new revealed preference testability axioms for models that extend the traditional neoclassical choice framework. Specifically, in my second essay, I address the intertemporal allocation of spending by collectives, whilst my final essay integrates taste variation into the utility maximisation framework. In both of these essays, I develop my testable results into practical algorithms that allow one to recover salient features of individual preferences. In my second essay, a methodology is developed to recover the minimal intrahousehold heterogeneity in theory-consistent discount rates, whilst my final essay develops a quadratic programming procedure that facilitates the recovery of the minimal interpersonal and intertemporal heterogeneity in tastes that is required to rationalise observed choice patterns. Applying these techniques to consumption micro-data yields new empirical insights that are of relevance to the applied literatures on time discounting, family economics and the public policy debate on tobacco control.

In a controlled lab experiment, we investigate hypothetical biases in the value of time by comparing stated preference (SP) and revealed preference (RP) values attached to unexpected waiting times. The SP and RP choice sets are identical in terms of design with the only difference being that the RP choices have real consequences in terms of unexpected waiting times and monetary incentives. We find a substantial hypothetical bias with the average SP value of time being only 71% of the corresponding RP value. The bias is mainly driven by participants who have scheduling constraints during the time of the unexpected wait. Scheduling constraints are taken into account to a much lesser extent in the SP setting than in the RP setting, presumably because only in the latter, the consequences of ignoring them are costly. We find evidence that this effect is stronger for persons with relatively low cognitive ability.

Stated preference and revealed preference are two commonly conducted non-market value evaluation methods which can also be applied to make evaluation of forest ecosystem. In the application of these evaluation methodologies, there always exists limitation from the data collection and empirical analysis. In the dissertation here, I extend the traditional evaluation methods with novel design or statistical analysis approaches to solve the practical problem we met in evaluation of forest ecosystem. The first and second chapters are based on stated preference methods. The first chapter employ both the mail survey and on-site survey to investigate the preference for attributes of low-impact timber harvesting programs. In the second chapter, we recruit three interest groups for on-site survey and compare their preference for the low-impact timber harvesting programs. In these first two chapters, choice modeling method is employed to elicit the respondents' preferences, and I also use bootstrap method to get robust estimation results for small sample size data. The last chapter employed revealed preference method to evaluate the economic losses from hemlock damages caused by forest pest. Three different interpolation methods are employed to scale-up the analysis from sites to states. Based on the findings of all three chapters, we can see that these survey design and statistical methods help to overcome the limitations in empirical analysis of forest ecosystem and make more robust inferences for design forest protection policies. / Ph. D.

The aim of this research was to construct a freight mode choice model, from the perspective of New Zealand freight shippers, identifying the possibility of mode substitution effects. Shipper’s freight modal choice depends on freight demand and infrastructure as well as the quality of service characteristics of alternative modes, such as transport cost, delivery time, reliability, damage and loss and frequency of service. Freight logistics characteristics, such as the attributes of the shipper, the attributes of the commodities to be transported, and the spatial attributes of shipments, strongly influence modal choice. In New Zealand, due to the heterogeneity of firms and issues of confidentiality and reliability of data, relatively little research has been done on modelling freight mode choice. This research involved revealed preference (RP) and stated preference (SP) surveys of representative freight shippers and agents. User-specific data make it possible to better identify the dependence between shipper’s mode shift behaviour and freight logistics in New Zealand circumstances. Moreover, by applying a discrete choice approach, the possibility of mode substitution effects was investigated. This research approach was prompted by substantial changes in New Zealand’s freight transport patterns due to the increasing use of logistic processes, and previously developed models using a four-stage approach fail to model elements of firms’ characteristics (i.e. size of shipments, delivery distance, export volume, product shelf-life, size and location of firm, number of road fleets, and relationship with contracted carriers). The outcomes of this research have shown that many of the operational and logistical influences that affect mode choice vary with the shipper and the industry. As a result, public policy makers should recognize that effective policy must consider both the needs of the transportation service provider and user. In particular, the public policy maker should recognize that freight transport mode choice results from an array of interactions among transportation characteristics, logistics characteristics and product characteristics.

<p>In this thesis I estimate a monetary value of the risk attached to living near a hazardous waste</p><p>site in the town of Teckomatorp. This site is the result of hundreds of rusty leaking barrels of</p><p>toxins being buried in the ground by the company BT Kemi in the 1970’s. Ever since then the</p><p>site has been remediated in several steps and is still contaminated today. For estimating the</p><p>perceived risk of living near this site I use a hedonic price model (HP) which is a form of a</p><p>revealed preference approach. In a HP model the price of a market good is a function of</p><p>different utility-bearing characteristics and the estimated parameters can be used to calculate</p><p>the implicit prices of these characteristics. In this case I use a data set from the National</p><p>Swedish Institute for Building Research (IBF) and regress property price on a number of</p><p>housing characteristics. I compare an estimated town-effect for Teckomatorp with the</p><p>estimates for two control towns: Billeberga and Anderslöv. I can confirm my hypothesis that,</p><p>after controlling for housing characteristics, there is a negative effect on prices of property in</p><p>Teckomatorp. I find that property prices are on average 46878 SEK lower in Teckomatorp</p><p>than in the two control towns.</p>

In this thesis I estimate a monetary value of the risk attached to living near a hazardous waste site in the town of Teckomatorp. This site is the result of hundreds of rusty leaking barrels of toxins being buried in the ground by the company BT Kemi in the 1970’s. Ever since then the site has been remediated in several steps and is still contaminated today. For estimating the perceived risk of living near this site I use a hedonic price model (HP) which is a form of a revealed preference approach. In a HP model the price of a market good is a function of different utility-bearing characteristics and the estimated parameters can be used to calculate the implicit prices of these characteristics. In this case I use a data set from the National Swedish Institute for Building Research (IBF) and regress property price on a number of housing characteristics. I compare an estimated town-effect for Teckomatorp with the estimates for two control towns: Billeberga and Anderslöv. I can confirm my hypothesis that, after controlling for housing characteristics, there is a negative effect on prices of property in Teckomatorp. I find that property prices are on average 46878 SEK lower in Teckomatorp than in the two control towns.

This thesis uses zonal travel cost method (ZTCM) to estimate consumer surplus of Peace &amp; Love festival in Borlänge, Sweden. The study defines counties as zones of origin of the visitors. Visiting rates from each zone are estimated based on survey data. The study is novel due to the fact that mostly TCM has been applied in the environmental and recreational sector, not for short term events, like P&amp;L festival. The analysis shows that travel cost has a significantly negative effect on visiting rate as expected. Even though income has previously shown to be significant in similar studies, it turns out to be insignificant in this study. A point estimate for the total consumer surplus of P&amp;L festival is 35.6 million Swedish kronor. However, this point estimate is associated with high uncertainty since a 95 % confidence interval for it is (17.9, 53.2). It is also important to note that the estimated value only represents one part of the total economic value, the other values of the festival's totaleconomic value have not been estimated in this thesis.

This research presents the first North American route-choice model for cyclists developed from a large sample of GPS data. These findings should encourage all interested municipalities to implement cycling as part of their transportation planning by determining key designing and planning factors to encourage cycling. The analysis is based on processing revealed preference data obtained from 415 self-selected cyclists in Waterloo, Ontario, which corresponded to 2000 routes. Cyclists' route decisions were modeled using multinomial logit framework of discrete choice theory. The main finding involved in capturing two different behaviour groups, namely experienced and inexperienced cyclists. This was subsequently reflected in the two developed models. The key factors impacting route-choice were found to be trip length, speed, volume, bicycle lane presence and percent of uphill gradient that cyclists face. The predictive power of the best model was 65%. The outlier analysis found that the relative significance of uphill gradient coefficient in one circumstances and perhaps the exclusion of unobserved variables, in other circumstances could be the cause why probability of actual choice was not predicted by both models all the time. In addition, this research involved in the development of a transferability study involving route-choice modeling for cyclists. The analysis is based on the revealed preference data obtained from 255 self-selected cyclists in Peel Region, Ontario, which corresponded to 425 unique routes. The choice set contained actual routes and a combination of alternatives obtained by labeling and impedance rules. The transferability of Waterloo's model to Peel Region was 37%. This means that cyclists behaviour in the Peel Region can be predicted correctly by travel length, bicycle lane presence and percent of uphill gradient for every third cyclist.

This thesis uses nonparametric revealed preference methods to derive new tests for consistency with models of consumer behaviour, and discuss the implications for welfare analysis. Chapter 1 demonstrates how to conduct revealed preference analysis when prices, and hence budget constraints, are only partially observed. This chapter extends the revealed preference results of Crawford and Polisson (2015), derived for the static case, to dynamic settings, allowing for storability of goods. Necessary and sufficient conditions for consistency with intertemporal models are derived, which do not require the researcher to distinguish between corner solutions and unavailability of the good, or to impute prices. Chapter 2 discusses the validity of using reported happiness measures as proxies of utility or social welfare, by testing for consistency between revealed and reported preference orderings in Japanese household survey data. Although the expenditure behaviour of most households is consistent with standard models of utility maximisation, it is generally inconsistent with the preference ordering given by their reported happiness. This inconsistency is likely due to reporting error in the happiness measure, and suggests that happiness and utility are empirically distinct and noninterchangeable. Chapter 3 investigates the effect of price inattention on inflation misperceptions and cost-of-living indices, by developing a behavioural model in which consumers only notice price changes above a certain threshold. A data application, using supermarket scanner data, demonstrates that this model generates plausible results; in particular, consumers have more accurate perceptions of inflation during periods of high or volatile inflation, but may substantially misperceive inflation when it is low. These results have important implications for conducting welfare analysis when consumers are not fully attentive to price changes.

This dissertation uses a convenience sample of members of eBird, a large citizen science project maintained by the Cornell University's Laboratory of Ornithology, to explore the value of avian biodiversity to bird watchers. Panel data (i.e. longitudinal data) are highly desirable for preference estimation. Fortuitously, the diaries of birding excursions by eBird members provide a rich source of spatial data on trips taken, over time by the same individuals, to a variety of birding destinations. Origin and destination data can be combined with exogenous species prevalence information. These combined data sources permit estimation of utility-theoretic choice models that allow derivation of the marginal utilities of avian biodiversity measures as well as the marginal utility of net income (i.e. consumption of other goods and services). Ratios of these marginal utilities yield marginal willingness to pay (MWTP) estimates for numbers of bird species (or numbers of species of different types, in richer specifications). MWTP for levels of other attributes of birding destinations are also derived (e.g. ecosystem type, management regime, seasonal variations, a time trend).\\ The chapters are organized as follows: Chapter 2 is a stand-alone paper that demonstrates the feasibility of a travel-cost based random utility model with the eBird data. This chapter focuses on measuring the total number of bird species at each birding hotspot in Washington and Oregon states. This chapter does not differentiate among types of birders beyond using their recent birding activities in an analysis of habit formation or variety-seeking behavior. For this model, beyond past behavior, a representative consumer is postulated. Chapter 3 starts from the basic specifications identified in Chapter 2 and explores heterogeneous preferences among consumers as well as their preferences for species richness and for different categories of birds. This chapter explores whether different types of birds are relatively more attractive to different types of birders (for example, by gender or by age or by neighborhood characteristics and educational attainment). Chapter 4 is an extension of the work in Chapter 3 to explore how changing site attributes in the face of climate change effects birder welfare. This dissertation includes previously unpublished co-authored material. / 10000-01-01