nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2005‒12‒14
three papers chosen by
Philip Yu
Hong Kong University

  1. A practical test for the choice of mixing distribution in a discrete choice model By Mogens Fosgerau; Michel Bierlaire
  2. In-Work Policies in Europe: killing two birds with one stone? By Bargain O; Orsini K
  3. Effects of Advanced Traveller Information Systems on Commuters' Behaviour By Thorsten Chmura; Johannes Kaiser; Thomas Pitz; Mark Blumberg; Marco Brück

  1. By: Mogens Fosgerau (Danish Transport Research Institute); Michel Bierlaire (Ecole Polytechnique Fédérale de Lausanne)
    Abstract: The choice of a specific distribution for random parameters of a discrete choice model is a critical issue in transportation analysis. Indeed, various pieces of research have demonstrated that an inappropriate choice of the distribution may lead to serious biases in model forecast and in the estimated means of random parameters. In this paper we propose a practical test, based on seminonparametric techniques. The test is analyzed both on synthetic and real data, and is shown to be simple and powerful.
    Keywords: Seminonparametric, discrete choice, mixed logit, value of time
    JEL: C1 C2 C3 C4 C5 C8
    Date: 2005–12–05
  2. By: Bargain O; Orsini K
    Abstract: Earning an income is probably the best way to avoid poverty and social exclusion, hence the recent trend of promoting employment through in-work transfers in OECD countries. Yet, the relative consensus on the need for ‘making work pay’ policies is muddied by a number of concerns relative to the design of the reforms and the treatment of the family dimension. Relying on EUROMOD, a EU-15 integrated tax-benefit microsimulation software, we simulate two types of in-work benefits. The first one is means-tested on family income, in the fashion of the British Working Family Tax Credit, while the second is a purely individualized low wage subsidy. Both reforms are built on the same cost basis (after behavioral responses) and simulated in three European countries which experience severe poverty traps, namely Finland, France and Germany. The potential labor supply responses to the reforms and the subsequent redistributive impacts are assessed for each country using a structural discrete-choice model. We compare how both reforms achieve poverty reduction and social inclusion (measured as the number of transitions into activity). All three countries present different initial conditions, including institutional environment, existing tax-benefit systems and distribution of incomes and wages. These sources of heterogeneity are exploited together with different labor supply sensitivities to explain the cross-country differences in the impact of the reforms.
    Keywords: tax-benefit systems, in-work benefits, microsimulation, household labor supply, multinomial logit.
    JEL: C25 C52 H31 J22
    Date: 2004–10
  3. By: Thorsten Chmura (Laboratory for Experimental Economics, University of Bonn, Germany); Johannes Kaiser (Laboratory for Experimental Economics, University of Bonn, Germany); Thomas Pitz (Laboratory for Experimental Economics, University of Bonn, Germany); Mark Blumberg (University of Bonn); Marco Brück (University of Bonn)
    Abstract: A genetic algorithm approach is used to study the behaviour of agents in a simulation of a daily route choice. There are two roads to choose and we show that there is a welfare enhancing effect of an Advanced Traveller Information System (ATIS) in comparison to the standard case without an ATIS. In the first case it is remarkable that not all agents follow the recommendation of the ATIS and the equilibrium distribution is only approximately attained.
    Keywords: traffic, computational economics, genetic algorithm, action trees, multi agents systems, simulation, traveller information system
    JEL: C45 C61 D83 L92
    Date: 2005–12–02

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