nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2005‒02‒20
five papers chosen by
Philip Yu
Hong Kong University

  1. Latent Variables in a Travel Mode Choice Model: Attitudinal and Behavioural Indicator Variables By Vredin Johansson, Maria; Heldt, Tobias; Johansson, Per
  2. Axiomatization of a Preference for Most Probable Winner By Pavlo R. Blavatskyy
  3. Analyzing the Determinants of Freight Shippers’ Behavior: Own-Account versus Purchased Transport in Andalusia. By Cristina Borra Marcos; Luis Palma Martos
  4. Environment as Cultural Heritage: The Armenian Diaspora’s Willingness-to-Pay By Hua Wang; Craig Meisner; Benoît Laplante
  5. Labor Market Transitions in Peru By Javier Herrera; Gerardo David Rosas Shady

  1. By: Vredin Johansson, Maria (Department of Economics); Heldt, Tobias (Department of Economics); Johansson, Per (Department of Economics)
    Abstract: In a travel mode choice context, we use survey data to construct and test the significance of five individual specific latent variables – environmental preferences, safety, comfort, convenience and flexibility - postulated to be important for modal choice. Whereas the construction of the safety and environmental preference variables is based on behavioural indicator variables, the construction of the comfort, convenience and flexibility variables is based on attitudinal indicator variables. Our main findings are that the latent variables enriched discrete choice model outperforms the traditional discrete choice model and that the construct reliability of the “attitudinal” latent variables is higher than that of the “behavioural” latent variables. Important for the choice of travel mode are modal travel time and cost and the individual’s preferences for flexibility and comfort as well as her environmental preferences.
    Keywords: Modal choice; latent variable; discrete choice model; modal safety
    JEL: C35 R41
    Date: 2005–02–07
  2. By: Pavlo R. Blavatskyy
    Abstract: In binary choice between discrete outcome lotteries, an individual may prefer lottery L1 to lottery L2 when the probability that L1 delivers a better outcome than L2 is higher than the probability that L2 delivers a better outcome than L1. Such a preference can be rationalized by three standard axioms (solvability, convexity and symmetry) and one less standard axiom (a fanning-in). A preference for the most probable winner can be represented by a skewsymmetric bilinear utility function. Such a utility function has the structure of a regret theory when lottery outcomes are perceived as ordinal and the assumption of regret aversion is replaced with a preference for a win. The empirical evidence supporting the proposed system of axioms is discussed.
    Keywords: expected utility theory, axiomatization, betweenness, fanning-in, skew-symmetric bilinear utility, regret theory
    JEL: C91 D81
  3. By: Cristina Borra Marcos (Universidad de Sevilla); Luis Palma Martos (Universidad de Sevilla)
    Abstract: Previous work in the demand for freight transportation has focused in the rail-truck substitution problem, leaving aside the prior own-account versus third-party tradeoff, often found in transportation decision-making. In Andalusia, domestic freight transport takes place mostly by road, an important part of which is own-account transport. The purpose of this paper is to analyze shippers’ behavior relative to this question, paying particular attention to whether the decision to use a private form of transport is taken on a short term or on a medium term horizon. In order to provide a quantitative evaluation, as an illustrative case, the models developed are tested on data gathered by means of a sample survey conducted to Andalusian enterprises belonging to the food industry.
    Keywords: Freight transport demand, shippers’ behavior, discrete-choice models, own-account transport.
    JEL: R41 C35
    Date: 2004
  4. By: Hua Wang (World Bank); Craig Meisner (World Bank); Benoît Laplante
    Abstract: Laplante, Meisner, and Wang present a study of willingness-to-pay of the Armenian Diaspora in the United States to protect Armenia’s Lake Sevan, a unique and precious symbol of the Armenian cultural heritage. Dichotomous choice contingent valuation questions were asked in mail surveys to elicit respondents’ willingness to pay for the protection of Lake Sevan. The results show that on average, each household of the Armenian Diaspora in the United States would be willing to provide a one-time donation of approximately US$80 to prevent a further degradation of Lake Sevan, and approximately US$280 to restore the quality of the lake by increasing its water level by three meters. This paper—a product of the Infrastructure and Environment Team, Development Research Group—is part of a larger effort in the group to understand environmental economics.
    Keywords: Environment; Globalization
    Date: 2005–02–11
  5. By: Javier Herrera (DIAL, IRD, Paris); Gerardo David Rosas Shady (Inter American Development Bank, University of Paris 1 Panthéon-Sorbonne, DIAL)
    Abstract: (english) Traditional labor market analysis based solely on the net unemployment rate fails to explain the apparent paradox between a relatively moderate unemployment rate in Peru (around 10%, with a weak sensibility to wide macroeconomic fluctuations), and the fact that unemployment is one of the major issues in Peru. One possible explanation is that this static indicator of cross section net unemployment balance is compatible with high flows in and out of employment states. To address these issues we needed to conduct a dynamic analysis using panel data. Using the Peruvian national household survey (ENAHO), we constructed a panel of working age individuals at the national level for the period 1997-1999. Like previous work in developing countries, we found that there is an important degree of job mobility in Peru. We also found that most of the transitions occur between employment and inactivity instead of between employment and unemployment. We also showed that the rate of permanent unemployment is very low so that unemployment would be essentially a frictional phenomenon. Further, considering the different transition states, we elaborated an unconditional transition profile, including individual and household characteristics, like gender, age and education levels for example, associated with each transition status. Finally, after examining these labor market transitions and the possible sample selection bias, we estimated a multinomial logit model. This model allowed us to appreciate the (conditional) incidence of individual and household characteristics as well as the effects of different shocks on the labor transition states. _________________________________ (français) Les analyses traditionnelles du marché du travail s’avèrent incapables d’expliquer le paradoxe apparent entre un taux de chômage relativement modéré dans un pays tel que le Pérou (environ 10%, taux peu sensible aux fortes fluctuations macro-économiques) et la perception d’une grave crise de l’emploi. Une explication possible pourrait résider dans le fait que cet indicateur statique en coupe instantanée ne mesure pas les flux élevés entre les situations d’emploi et d’inemploi. Pour analyser ces questions, il est nécessaire de conduire une analyse dynamique sur données de panel. Nous avons ainsi construit un panel national d’individus en âge de travailler pour la période 1997-1999 à partir de l’enquête péruvienne auprès des ménages (ENAHO). Comme d’autres études réalisées dans des pays en développement, nous constatons qu’il existe une importante mobilité de l’emploi au Pérou. Nous trouvons également que la plupart des transitions interviennent entre emploi et inactivité plutôt qu’entre emploi et chômage. Le taux de chômage permanent apparaît très faible et le chômage serait donc essentiellement un phénomène frictionnel. Pour aller plus loin, nous avons élaborés des profils de transition inconditionnels, incluant les caractéristiques individuelles et du ménage, telles que le genre, l’âge, et le niveau d’éducation, associé avec chaque état de transition. Finalement, après avoir examiné ces transitions sur le marché du travail et les biais de sélection possibles, nous avons estimé un modèle logit multinomial. Ce modèle nous a permis d’apprécier l’incidence (conditionnelle) des caractéristiques individuelles et des ménages ainsi que des différents chocs sur les états de transition en matière d’emploi.
    Date: 2003–11

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