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Conference Paper
An Estimation of the Economic Value of Converged Communications and Broadcasting Services using Additive Hazard Regression Model
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- Authors
- Choon Mo Ahn
- Issue Date
- 2006-08
- Citation
- ITS European Regional Conference 2006, pp.1-10
- Language
- English
- Type
- Conference Paper
- Abstract
- Parametric and semi-nonparametric estimation techniques for the dichotomous choice contingent valuation model are receiving considerable interest. These methodologies originally have been developed to find the "willingness to pay (WTP)" or implicit valuation of non-market goods. Recently, it has been applied to analyze the consumers' preference for emerging IT services, i.e., Wireless Broadband (WiBro -Portable Internet Service), Digital Multimedia Broadcasting (DMB), Voice of IP. The form of WTP distribution can be used to set up tariff of new service. Furthermore, it can be used for marketing strategy if we know the relations between WTP and covariate -salary, expenditure for telecommunication services, age, etc.The methodologies for finding WTP distribution can be classified three categories. The first one is parametric approach. In this approach, we assume WTP or logarithm of WTP can be decomposed as deterministic part (linear form) and random part as a error distribution. If the model assumption is correct, parametric approach is very efficient to apply. But the adequacy of model assumption has to be justified.The second approach is fully nonparametric one. The most popular model is Turnbull's estimator and kernel method. As many researched noted, this approach can give lower bound of mean WTP.The final approach is semi-nonparametric (SNP) approach. The core of SNP is to relax the assumption of a certain error distribution in parametric models. In SNP, we perform flexible functional approximations to the unknown distribution of preferences. SNP is somewhat complicated and use many smoothing technique. For reviews, see Crooker and Herriges (2004).In this paper, we apply a semi-parametric estimation procedure for binary discrete response data. This estimator is based on the statistical modeling of so-called current status data in biostatistics. This approach decomposes WTP distribution as the product of the baseline distribution function of WTP and effect of covariate (additive hazard regression). In this field, we know that Cox's proportional hazard assumption is widely used one. However, In certain situation, this approach can give more reasonable results. We give empirical study using a contingent valuation survey of willingness to pay for next generation converged communications and broadcasting services, which is analyzed once by Kang, Cho and Lie (2005).
- KSP Keywords
- Contingent valuation, Current status, Dichotomous choice, Digital multimedia broadcasting, Empirical study, Estimation Technique, Hazard regression, IT Services, Internet service, Lower bound, Marketing Strategy