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on Discrete Choice Models |
| By: | Jean-Michel Dalle (University Pierre-et-Marie-Curie & IMRI- Dauphine); Paul A. David (Stanford University & Oxford Internet Institute) |
| Abstract: | We present an original modeling tool, which can be used to study the mechanisms by which free/libre and open source software developers’ code-writing efforts are allocated within open source projects. It is first described analytically in a discrete choice framework, and then simulated using agent-based experiments. Contributions are added sequentially to either existing modules, or to create new modules out of existing ones: as a consequence, the global emerging architecture forms a hierarchical tree. Choices among modules reflect expectations of peer- regard, i.e. developers are more attracted a) to generic modules, b) to launching new ones, and c) to contributing their work to currently active development sites in the project. In this context, we are able – particularly by allowing for the attractiveness of “hot spots”-- to replicate the high degree of concentration (measured by Gini coefficients) in the distributions of modules sizes. The latter have been found by empirical studies to be a characteristic typical of the code of large projects, such as the Linux kernel. Introducing further a simple social utility function for evaluating the mophology of “software trees,” it turns out that the hypothesized developers’ incentive structure that generates high Gini coefficients is not particularly conducive to producing self-organized software code that yields high utility to end-users who want a large and diverse range of applications. Allowing for a simple governance mechanism by the introduction of maintenance rules reveals that “early release” rules can have a positive effect on the social utility rating of the resulting software trees. |
| JEL: | L |
| Date: | 2005–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502008&r=dcm |
| By: | Jørgensen, Øystein (Dept. of Economics, University of Oslo); Ognedal, Tone (Dept. of Economics, University of Oslo); Strøm, Steinar (Dept. of Economics, University of Oslo) |
| Abstract: | We estimate labor supply when tax evasion is an option, using a discrete choice model on pooled Norwegian survey data from 1980 and 2001. Direct labor supply elasticities, conditional on sectors, are in the range of 0.2-0.4. The elasticities are higher for work that is not registered for taxation, than for registered work. Overall wage increases have a positive impact on the supply of registered work and a negative impact on supply of unregistered work. In addition to economic factors such as wages and tax rates, also social norms and opportunities for tax evasion at the work place have an impact on the supply of unregistered labor. The model is used to simulate the impact on labor supply of changes in the tax structure, such as the lowering of marginal tax rates. The fraction of the population who did unreported work was reduced from 1980 to 2001. Lower and less progressive tax rates after 1980 have contributed to this reduction. Although taxes matter for supply of both reported and non-reported labor, the impact is not strong. Social norms and opportunities for tax evasion at the work place are also important in explaining the change. |
| Keywords: | Labor supply; tax evasion; survey data; microeconometrics |
| JEL: | C25 D12 D81 H26 J22 |
| Date: | 2005–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2005_006&r=dcm |
| By: | Nilsson, William (Department of Economics, Umeå University) |
| Abstract: | This study focuses on the persistence of poverty in Sweden. The purpose is to distinguish between two different reasons why poverty could persist on an individual level. By using a sample of identical twins, this study takes advantage of the similarity within pairs of twins to separate family specific heterogeneity from true state dependence, where the experience of poverty leads to a higher risk of future poverty. The results, based on a four variate probit model, show the importance of true state dependence in poverty. When using the information on whether an individual received social assistance as a measure of poverty, family specific heterogeneity explains between 24 and 31 percent of the poverty persistence in the sample. |
| Keywords: | poverty; heterogeneity; state dependence; twins; multivariate probit |
| JEL: | C35 D31 I32 |
| Date: | 2005–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0650&r=dcm |
| By: | Nilsson, William (Department of Economics, Umeå University) |
| Abstract: | This study focuses on the persistence of poverty in Sweden. The purpose is to distinguish between two different reasons why poverty could persist on an individual level. By using a sample of identical twins, this study takes advantage of the similarity within pairs of twins to separate family specific heterogeneity from true state dependence, where the experience of poverty leads to a higher risk of future poverty. The results, based on a four variate probit model, show the importance of true state dependence in poverty. When using the information on whether an individual received social assistance as a measure of poverty, family specific heterogeneity explains between 24 and 31 percent of the poverty persistence in the sample. |
| Keywords: | unemployment; divorce; spousal response; sample selection; panel data |
| JEL: | C33 J12 J22 |
| Date: | 2005–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0651&r=dcm |
| By: | Nilsson, William (Department of Economics, Umeå University) |
| Abstract: | Paper [I] studies equality of opportunity in Sweden. The distinction between circumstances that constrain an individual’s opportunities and the individual choices also affecting a particular outcome is the main idea of theories of equality of opportunity. In this study, equality of opportunity is analyzed for Swedish data using a large set of variables indicating different circumstances likely to affect an individual’s opportunities. A semiparametric model is estimated to allow for a possible nonlinear relation between parental income and the income of the adult child. The reason is a hypothesis that a constrained investment behavior would make the relationship nonlinear. The results indicate significant inequality of opportunities. However, they do not indicate a nonlinear relationship between parental income and the income of the adult child. Thus, the hypothesis that low income families will have a constrained investment behavior in human capital formation is brought into question as the explanation of intergenerational income correlation in Sweden. <p> Paper [II] focuses on the persistence of poverty in Sweden. The purpose is to distinguish between two different reasons why poverty could persist on an individual level. By using a sample of identical twins, this study takes advantage of the similarity within pairs of twins to separate family specific heterogeneity from true state dependence, where the experience of poverty leads to a higher risk of future poverty. The results, based on a four variate probit model, show the importance of true state dependence in poverty. When using the information on whether an individual received social assistance as a measure of poverty, family specific heterogeneity explains between 24 and 31 percent of the poverty persistence in the sample. <p> Paper [III] analyzes the consequences of unemployment for a Swedish sample of couples. The purpose is to estimate the possible income replacement that a spouse can provide. Unemployment can also affect the probability that the couples split up. Since not all couples remain in the analysis, a potential selection problem can occur. To deal with this problem, and also to take care of unobserved heterogeneity, a sample selection model for panel data is estimated. The results indicate that it is necessary to take into account the selection problem. A period in unemployment is found to be correlated with a higher female income only in the case of men who earned a fairly high income before becoming unemployed. Women who earned a fairly low income and were subject to a long period of unemployment are found to be compensated by a higher male income. |
| Keywords: | Keywords: equality of opportunity; semiparametric; poverty; heterogeneity; state dependence; twins; unemployment; divorce; spousal response; selection and panel data |
| JEL: | C14 C33 C35 D31 D63 I32 J12 J22 J62 |
| Date: | 2005–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0652&r=dcm |
| By: | Buddelmeyer, Hielke (Melbourne Institute of Applied Economic and Social Research and IZA Bonn); Mourre, Gilles (ECFIN, European Commission); Ward, Melanie (European Central Bank, CEPR and IZA Bonn) |
| Abstract: | This paper looks at the role of part-time work in labour mobility for 11 European countries. We find some evidence of part-time work being used as a stepping stone into full-time employment, but for a small proportion of individuals (less than 5%). Part-time jobs are also found to be more frequently taken up as a means to enter the labour market than to leave it. Multinomial logit regression of the determinants of part-time work reveals household composition, past labour market history and country of residence as very important for both men and women in their decision to work part time. Random effects regression controlling for individual heterogeneity, and the comparison of results for Europe and the US, reveals that a significantly higher proportion of female workers in Europe prefer inactivity and a significantly lower percentage prefer full-time, over part-time employment, than in the US, with considerable variation across EU countries. |
| Keywords: | labour market mobility and flexibility, labour supply, full-time and part-time employment, unemployment, non-employment, gender, stepping stones, labour market entry and exit |
| JEL: | J21 J22 J16 J60 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1550&r=dcm |
| By: | Justin G. Trogdon (School of Economics, University of Adelaide) |
| Abstract: | Efforts to regionalize cardiac services can increase access costs for patients. This study quantifies this trade off by estimating the effects of changes in the regulation of hospital services on treatments and outcomes. A demand model for surgery services is specified in which heart attack victims form expectations of the need for and productivity of surgery in their choice of hospital and treatment. The results indicate that mortality is relatively insensitive to moderate changes in policy: changes in travel costs and volume offset one another. Despite similar health outcomes, the competing policies have different implications for taxpayers. |
| Keywords: | heart attack, Medicare, dynamic discrete choice estimation |
| JEL: | I12 I18 C35 |
| Date: | 2005–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwphe:0502001&r=dcm |
| By: | Michelle Sovinsky Goeree (Claremont McKenna College) |
| Abstract: | Traditional models of consumer choice assume consumers are aware of all products for sale.This assumption is questionable, especially when applied to markets characterized by a high degree of change, such as the personal computer (PC) industry. I present an empirical discrete-choice model of limited information on the part of consumers, where advertising influences the set of products from which consumers choose to purchase. Multi-product firms choose prices and advertising in each medium to maximize their profits. I apply the model to the US PC market, in which advertising expenditures are over $2 billion annually. The estimation technique incorporates macro and micro data from three sources. Estimated median industry markups are 19% over production costs. The high industry markups are explained in part by the fact that consumers know only some of the products for sale.Indeed estimates from traditional consumer choice models predict median markups of one fourth this magnitude. I find that product-specific demand curves are biased towards being too elastic under traditional models of consumer choice. The estimates suggest that PC firms use advertising media to target high-income households, that there are returns to scope in group advertising, and that word-of-mouth or experience plays a role in informing consumers. The top firms engage in higher than average advertising and earn higher than average markups. |
| JEL: | L15 D12 D21 M37 L63 |
| Date: | 2005–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503002&r=dcm |
| By: | Israel J. Muñoz (Universidad Complutense de Madrid); Elena Huergo (Universidad Complutense de Madrid) |
| Abstract: | Este trabajo analiza la entrada y la competencia en servicios de telecomunicaciones, en los que las empresas se diferencian por sus costes hundidos y por la valoración que reciben de los consumidores. En este marco de análisis desaparece el problema de coordinación presente en la literatura sobre entrada con costes hundidos, debido a que ahora la competencia en precios se ve modificada por el parámetro de valoración. Cuando se introduce heterogeneidad en los consumidores, la entrada queda definida por la combinación de costes y valoración, mientras los consumidores dirigen su demanda hacia la empresa que mejor se adapta a su tipo. |
| Keywords: | Entry, telecommunications, sunk costs, discrete choice of consumers |
| JEL: | L1 L11 L96 |
| Date: | 2005–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0504002&r=dcm |
| By: | Bernhard Ganglmair (Bonn Graduate School of Economics) |
| Abstract: | New data from Uganda is used for the joint estimation of a household's child labor and child school attendance decision applying a bivariate probit model. Individual characteristics, income and asset variables as well as variables denoting household composition and number of siblings were used as regressors. Results implying a stronger trade-off between these two decisions in urban than rural areas and stronger for girls than for boys are obtained. Especially rural boys thus have a stronger tendency to combine their labor activities with schooling. This 'gender bias' is reinforced by a significantly strong effect of a household's wage income on boys' decisions, whereas girls are little or not affected at all. For girls, household composition and number of younger siblings are relatively more decisive. This also suggests a possible 'role order' among children within the household. |
| Keywords: | child labor, school attendance, decision trade-off, simultaneous labor--school decision, bivariate probit, Uganda |
| JEL: | C35 J43 |
| Date: | 2005–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0504002&r=dcm |
| By: | Arthur Zillante (ICES, George Mason University) |
| Abstract: | Reputation effects have been thought to influence how candidates in an election are viewed by the electorate. Using data from Major League Baseball, I attempt to quantify the effect that reputation plays in voting for the Gold Glove award. While the award is designed to reflect current-year defensive accomplishments, two other hypotheses have been suggested to explain voting behavior. The first is that voters use current-year offensive accomplishments in lieu of defensive accomplishments. The second hypothesis is that voters rely on the past performance of the players when casting their ballots, implying that reputation effects exist in the minds of voters. Results from probit estimation show that while reputation effects appear to have a significant effect on the outcome of the election, current-year offensive accomplishments do not. |
| Keywords: | Voting behavior, baseball |
| JEL: | D72 |
| Date: | 2005–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0502003&r=dcm |
| By: | Juan Prieto-Rodriguez (Universidad de Oviedo); Maria Jose Sanzo-Perez (Universidad de Oviedo); Javier Suarez-Pandiello (Universidad de Oviedo) |
| Abstract: | This paper is inscribed in the literature on fiscal fraud and moral of taxpayers. We analyse the attitude of the Spaniards respect to two kinds of fraud: the hiding of income to pay less taxes and the hiding of information to benefit fraudulently from goods and services that otherwise one would not have the right to enjoy. Besides, we examine the determining factors on these variables by estimating ordered probit models. According to the postulates of Public Choice Theory we have included in the analysis political orientation variables. These factors have verified the significant effects of the politics, confirming its importance on the individual’s fiscal moral. |
| Keywords: | ordered probit model, tax evasion, tax morale |
| JEL: | H26 H31 |
| Date: | 2005–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0502005&r=dcm |
| By: | Antonio Quesada (Universitat Rovira i Virgili, Spain) |
| Abstract: | Arrow’s and the Gibbard-Satterthwaite theorems are proved using a common proof strategy based on a dictatorship result for choice functions. One of the instrumental results obtained shows the inconsistency between the basic assumption in each of these theorems and a mild majority principle. |
| Keywords: | Arrow’s theorem; Gibbard-Satterthwaite theorem; Choice function; Majority. |
| JEL: | D71 |
| Date: | 2005–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0504003&r=dcm |
| By: | Bo Zhao (Center for Policy Research, Maxwell School, Syracuse University); Jan Ondrich (Center for Policy Research, Maxwell School, Syracuse University); John Yinger (Center for Policy Research, Maxwell School, Syracuse University) |
| Abstract: | This paper studies racial and ethnic discrimination in discrete choices by real estate brokers using national audit data from the 2000 Housing Discrimination Study. It uses a fixed effects logit model to estimate the probability that discrimination occurs and to study the causes of discrimination. The data set makes it possible to control for auditors' actual demographic and socioeconomic characteristics, along with the characteristics assigned for the purposes of the audit. The study finds that discrimination continues to be strong but also documents a downward trend in both the scope and incidence of discrimination since 1989. The estimations also identify both brokers' prejudice and white customers' prejudice as causes of discrimination. |
| JEL: | J15 R31 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:67&r=dcm |
| By: | Tania Rajadel (TEAM) |
| Abstract: | The paper investigates whether, as is often suggested by the literature, diversification towards the non-agricultural sector is considered as a risk- mitigating strategy by rural Pakistani households. This issue has already been addressed but usually as an ex post mechanism, i.e. smoothing consumption or income once a shock has occurred. The present work tests whether ex ante engagement in the non-agricultural sector is partly motivated by a desire to mitigate risk. The main feature of the paper is the use of an ex ante food vulnerability estimate. Vulnerability is defined as the probability of falling below a given threshold in the future. After constructing a vulnerability variable for each household, we run three separate probit estimations, one for each type of non-agricultural activity (unqualified wage labour, qualified wage labour, and self-employment), in order to evaluate the impact of vulnerability on participation to the non-agricultural sector. We take into account the endogeneity of the vulnerability estimate. We find that, conversely to what is usually assumed in the literature, vulnerable households are not more likely than others to engage in the non-agricultural sector mainly because of the inefficient organisation of wage labour markets and entry barriers. |
| Keywords: | Risk, insurance, vulnerability, non-farm employment, Pakistan. |
| JEL: | D91 O16 Q12 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:bla05004&r=dcm |
| By: | Laure Pasquier-Doumer (DIAL, IEP-Paris); Gerardo David Rosas Shady (Inter American Development Bank, University of Paris 1 Panthéon-Sorbonne, DIAL) |
| Abstract: | (English) The Peruvian society is characterized by a highly unequal income distribution. But, is it also an unfair society in accordance with the criterion of equality of opportunities? Several studies have shown that social origin does not necessarily have a decreasing effect during the life cycle. For example, social origin can continue to influence the professional career even after it has exerted an influence on education and the first job. This paper tries to answer this question by analysing the effect of social origin on occupational mobility in Peru. It describes occupational mobility in Peru as a useful instrument to understand the dynamics of the Peruvian labor market and shows the importance and complexity of this mobility. Finally, it attempts to explain to what extent social background affects occupational mobility after controlling for its effect on the prior stages of the life cycle. _________________________________ (français) La société péruvienne, caractérisée par une répartition très inégalitaire des revenus, est-elle également une société injuste au regard du critère d’égalité des chances ? L’article cherche des éléments de réponse à cette question en s’interrogeant sur le rôle de l’origine sociale sur la mobilité occupationnelle des individus au cours de 5 ans de carrière. En effet, différents travaux suggèrent que l’origine sociale n’a pas un effet forcement décroissant au cours du cycle de vie et qu’elle peut continuer à influencer le déroulement de la carrière professionnelle, même après qu’elle ait exercé une influence sur l’éducation et le premier emploi. L’article décrit tout d’abord la mobilité occupationnelle au Pérou en tant qu’instrument utile pour comprendre la dynamique du marché du travail péruvien et met en avant l’importance de cette mobilité et sa complexité. Ensuite, il cherche à tester si l’origine sociale est déterminante dans l’évolution de la carrière, même après avoir contrôlé ses effets sur les étapes antérieures du cycle de vie. |
| Keywords: | : Occupational mobility, equality of opportunities, Peru, Bivariate probit model, Mobilité occupationnelle, égalité d’opportunités, Pérou, probit bivarié. |
| JEL: | J62 D63 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt200504&r=dcm |
| By: | Alexis Derviz; Jiřà Podpiera |
| Abstract: | In this paper we investigate the determinants of the movements in the long-term Standard & Poors and CAMELS bank ratings in the Czech Republic during the period when the three biggest banks, representing approximately 60% of the Czech banking sector’s total assets, were privatized (i.e., the time span 1998–2001). The same list of explanatory variables corresponding to the CAMELS rating inputs employed by the Czech National Bank’s banking sector regulators was examined for both ratings in order to select significant predictors among them. We employed an ordered response logit model to analyze the monthly long-run S&P rating and a panel data framework for the analysis of the quarterly CAMELS rating. The predictors for which we found significant explanatory power are: Capital Adequacy, Credit Spread, the ratio of Total Loans to Total Assets, and the Total Asset Value at Risk. Models based on these predictors exhibited a predictive accuracy of 70%. Additionally, we found that the verified variables satisfactorily predict the S&P rating one month ahead. |
| Keywords: | Bank rating, CAMELS, ordered logit model, panel data analysis. |
| JEL: | C53 E58 G21 G33 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2004/01&r=dcm |