nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2005‒01‒02
eight papers chosen by
Philip Yu
Hong Kong University

  1. A Dynamic Model of Voting By Arianna Degan
  2. Joint Estimation of Sequential Labor Force Participation and Fertility Decisions Using Markov Chain Monte Carlo Techniques By Kenneth Troske; Alexandru Voicu
  3. Mode choice modelling. A literature review on the role of Quality of Service attributes and their monetary valuation in freight demand models By De Maeyer Jan; Pauwels Tom
  4. Willingness to Pay among Swedish Households to Avoid Power Outages - A Random Parameter Tobit Model Approach By Carlsson, Fredrik; Martinsson, Peter
  5. Does it Matter When a Power Outage Occurs? - A Choice Experiment Study on the Willingness to Pay to Avoid Power Outages By Carlsson, Fredrik; Martinsson, Peter
  6. Binary Effectivity Rules By Hans Keiding; Bezalel Peleg
  7. Utilitarian Collective Choice and Voting By Hillinger, Claude
  8. Taxation of car-ownership, car use and public transport: insight derived from a discrete choice numerical optimisation model By De Borger B.; Mayeres I.

  1. By: Arianna Degan (Department of Economics, University of Quebec at Montreal)
    Abstract: We propose and estimate a dynamic model of voting with asymmetric information incorporating the three main factors affecting voting choices of individual citizens: party identification, policy preferences, and candidates’ valence. Using individual level data on voting decisions in two consecutive presidential elections, we identify and estimate (1) the distribution of voters’ policy positions and (2) candidates’ valence. In addition to providing an equilibrium interpretation of the observed voting profiles and electoral outcomes, we use the estimated model to conduct counterfactual experiments to assess the relative importance of candidates’ policy positions, valence, and voters’ information on the outcomes of elections and to evaluate the performance of the electoral process.
    Keywords: Party identification, policy preferences, consecutive elections, valence
    JEL: D72
    Date: 2003–11–23
  2. By: Kenneth Troske (Department of Economics, University of Missouri-Columbia); Alexandru Voicu
    Abstract: In this paper we estimate the causal effect of children on the labor supply of women using panel data on women from the 1979 National Longitudinal Survey of Youth (NLSY79). We examine the effect of children both prior to and after birth as well as how the effect of children varies with the number of children. We also decompose the total effect of children into the direct and indirect components and separately examine the dynamics of these components. Sequential participation decisions for four levels of labor market involvement and fertility decisions are jointly modeled. We allow decisions to be correlated in a general fashion both across time and across choices. The estimation is performed using Markov chain Monte Carlo methods. We find that children have a strong effect on a women’s labor market behavior in the post-birth period and that differences in expected fertility have a strang effect on labor market behavior in the pre-birth period. We also find that both the direct and indirect effects are large immediately after the birth of a child but that the indirect effect declines quickly over time. The effects of children vary by education and race.
    Keywords: Female Labor Supply, Multivariate Probit Model, Gibbs Sampler
    JEL: C11 C15 J13 J22
    Date: 2004–12–23
  3. By: De Maeyer Jan; Pauwels Tom
    Date: 2003–05
  4. By: Carlsson, Fredrik (Department of Economics, School of Economics and Commercial Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Economics and Commercial Law, Göteborg University)
    Abstract: Using a contingent valuation survey, we elicit Swedish households’ willingness to pay (WTP) to avoid power outages. In the study respondents are asked to state their WTP for avoiding nine different types of outages. We therefore apply a random parameter Tobit model since there is cross-sectional heterogeneity and a proportion of zero responses. Based on the estimations, we find that the WTP depends positively on the duration of the outages, and that WTP is significantly higher for unplanned outages. The overall variation in the WTP due to observed heterogeneity in housing and socio-economic variables is small compared to the pure effects of power outages. Policy implications of those findings are discussed. <p>
    Keywords: Power outages; Contingent Valuation; Random parameters; Tobit model
    JEL: C25 C93 D12 Q41
    Date: 2004–12–20
  5. By: Carlsson, Fredrik (Department of Economics, School of Economics and Commercial Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Economics and Commercial Law, Göteborg University)
    Abstract: Using a choice experiment survey, the marginal willingness to pay (WTP) among Swedish households for reductions in power outages is estimated. The results from the random parameter logit estimation indicate that the marginal WTP increases with the duration of the outages, and is higher if the outages occur during weekends and during winter months. The random parameter logit model allows us to estimate a sample distribution of WTP. We find a significant unobserved heterogeneity in some of the outage attributes but not all. Furthermore we show that the sample distribution of WTP does not to any large extent suffer from the problem of reverse sign of the WTP. Therefore, choosing an unconstrained normal distribution might not be as problematic as one would think. Given that households have negative welfare effects from outages, which differ in timing and duration, and are rarely compensated for them, it is important that policy makers consider these negative impacts on households utility when regulating the electricity market. <p>
    Keywords: Choice experiment; Power outages; Random parameters; Willingness to pay
    JEL: C25 C93 D12 Q41
    Date: 2004–12–20
  6. By: Hans Keiding; Bezalel Peleg
    Abstract: A social choice rule is a collection of social choice correspondences, one for each agenda. An effectivity rule is a collection of effectivity functions, one for each agenda. We prove that every monotonic and superadditive effectivity rule is the effectivity rule of some social choice rule. A social choice rule is binary if it is rationalized by an acyclic binary relation. The foregoing result motivates our definition of a binary effectivity rule as the effectivity rule of some binary social choice rule. A binary social choice rule is regular if it satisfies unanimity, monotonicity, and independence of infeasible alternatives. A binary effectivity rule is regular if it is the effectivity rule of some regular binary social choice rule. We characterize completely the family of regular binary effectivity rules. Quite surprisingly, intrinsically defined von Neumann-Morgenstern solutions play an important role in this characterization.
    Keywords: social choice correspondences; effectivity functions; Nakamura’s number; von Neumann-Morgenstern solutions
    JEL: D71
    Date: 2004–10
  7. By: Hillinger, Claude
    Abstract: In his seminal Social Choice and Individual Values, Kenneth Arrow stated that his theory applies to voting. Many voting theorists have been convinced that, on account of Arrow?s theorem, all voting methods must be seriously flawed. Arrow?s theory is strictly ordinal, the cardinal aggregation of preferences being explicitly rejected. In this paper I point out that all voting methods are cardinal and therefore outside the reach of Arrow?s result. Parallel to Arrow?s ordinal approach, there evolved a consistent cardinal theory of collective choice. This theory, most prominently associated with the work of Harsanyi, continued the older utilitarian tradition in a more formal style. The purpose of this paper is to show that various derivations of utilitarian SWFs can also be used to derive utilitarian voting (UV). By this I mean a voting rule that allows the voter to score each alternative in accordance with a given scale. UV-k indicates a scale with k distinct values. The general theory leaves k to be determined on pragmatic grounds. A (1,0) scale gives approval voting. I prefer the scale (1,0,-1) and refer to the resulting voting rule as evaluative voting. A conclusion of the paper is that the defects of conventional voting methods result not from Arrow?s theorem, but rather from restrictions imposed on voters? expression of their preferences. The analysis is extended to strategic voting, utilizing a novel set of assumptions regarding voter behavior.
    JEL: D72 D71
    Date: 2004–12
  8. By: De Borger B.; Mayeres I.
    Abstract: In this paper we study the taxation of car ownership, car use and public transport in the presence of externalities within the framework of a discrete/continuous choice model. We first derive optimal taxes in a simplified setting, emphasizing the specific role of fixed car ownership taxes and the relevance of public transport demand by non-car owners for the optimal tax structure. A numerical optimisation model is then constructed to study welfare-optimal public transport fares and two-part tariffs on ownership and use of gasoline and diesel cars in Belgium. Results are as follows. First, the current differences in tax treatment between diesel and gasoline car ownership and car use cannot be justified on the basis of external cost and budgetary considerations. Efficient pricing requires substantial increases in the relative user tax on diesel cars as compared to gasoline cars; optimal fixed taxes are substantially below current levels and only marginally differ between car fuel types, implying a ver y large decrease in the tax on diesel cars. Second, large differences in fixed car taxes do result (i) if for political or technical reasons variable car taxes cannot be optimally adjusted, and (ii) if optimal taxes are implemented but the government uses kilometre taxes as the main variable tax instrument. Third, the results of a series of marginal tax reform exercises suggest that a shift form gasoline towards diesel taxation is welfare improving, both for fixed and variable taxes. Somewhat surprisingly, a shift from fixed towards variable taxes is not necessarily welfare-improving: it is for diesel, but not for gasoline cars.
    Date: 2004–10

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