nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2005‒12‒20
six papers chosen by
Philip Yu
Hong Kong University

  1. Experimental Designs for Environmental Valuation with Choice-Experiments: A Monte-Carlo Investigation By Silvia Ferrini; Riccardo Scarpa
  2. Capabilities and Equality of Health I By Hans Keiding
  3. Ignorance in Congressional Voting? Evidence from Policy Reversal on the Endangered Species Act By Edward J. Lopez; Daniel Sutter
  4. Pension Contributions as a Commitment device: evidence of sophistication among time-inconsistent households By Patricia Sourdin
  5. Women's Employment, Children and Transition An Empirical Analysis on Poland By Elena Bardasi; Chiara Monfardini
  6. Entry and Exit in a Liberalised Market. By Maria J. Gil-Molto; Claudio A. Piga

  1. By: Silvia Ferrini (University of Siena); Riccardo Scarpa (University of
    Abstract: We review the practice of experimental design in the environmental economics literature concerned with choice experiments. We then contrast this with advances in the field of experimental design and present a comparison of statistical efficiency across four different experimental designs evaluated by Monte Carlo experiments. Two different situations are envisaged. First, a correct a priori knowledge of the multinomial logit specification used to derive the design and then an incorrect one. The data generating process is based on estimates from data of a real choice experiment with which preference for rural landscape attributes were studied. Results indicate the D-optimal designs are promising, especially those based on Bayesian algorithms with informative prior. However, if good a priori information is lacking, and if there is strong uncertainty about the real data generating process - conditions which are quite common in environmental valuation - then practitioners might be better off with conventional fractional designs from linear models. Under misspecification, a design of this type produces less biased estimates than its competitors.
    Keywords: logit experimental design; efficiency; Monte Carlo choice experiments; non-market valuation
    JEL: C13 C15 C25 C99 Q26
    Date: 2005–12–13
  2. By: Hans Keiding (Department of Economics, University of Copenhagen)
    Abstract: The concept of capabilities, introduced originally by Sen with the aim to provide a better basis for the theory of inequality, has inspired many researchers but has not found any simple formal representation which might be instrumental in the construction of a comprehensive theory of equality. In the present paper, we present a formalization of the concept of capabilities based on Lancasterian characteristics, whereby a functioning of an individual is a method for transforming an initial position to a final outcome. In this context, we investigate whether preferences over capabilities as sets of functionings can be rationalized by maximization of a suitable utility function over the set of functionings. Such a rationalization turns out to be possible only in cases which must be considered exceptional and which do not allow for interesting applications of the capability approach to questions of health or equality. The conclusion which can be obtained from the predominantly negative results is that a formal description of capabilities much involve ideas which go beyond the simple representation as a family of choice sets.
    Keywords: capabilities; characteristics; equality of health
    JEL: D63 I10
    Date: 2005–11
  3. By: Edward J. Lopez (San Jose State University); Daniel Sutter (University of Oklahoma)
    Abstract: Objective: In 1978 Congress weakened several key provisions of the Endangered Species Act (ESA), which had been enacted only five years earlier. The objective is to compare alternative explanations for this policy reversal. Methods: Probit and multinomial logit models are used to explain empirically how senators voted in both 1973 and 1978, and to investigate why many senators switched their vote from supporting ESA to weakening it. Results: The findings here indicate that party affiliation and policymaker preferences were not important to the 1973 vote, but they were key variables in the 1978 votes and the vote-switching decision. Proxies for unexpected economic impacts of ESA on individual states have little explanatory power. Conclusions: Ignorance, as measured here, does not appear to explain this policy reversal. Rather, an influx of relatively conservative Democrats between 1973 and 1978 presents itself as the leading explanation.
    Keywords: endangered species act, congressional voting
    JEL: D1 D2 D3 D4
    Date: 2005–12–12
  4. By: Patricia Sourdin (The University of Adelaide)
    Abstract: Sophisticated agents with self-control problems value commitment devices that constrain future choices. Using Australian household data, I test whether these households value commitment devices in the form of illiquid pension contributions. Applying various probabilistic choice models, the results confirm the conjecture that households with problems of self-control are more likely to invest in illiquid pensions while less likely to hold very liquid forms of assets.
    Keywords: commitment device; pensions; intertemporal choice
    JEL: D91 H31 E21
    Date: 2005–12–12
  5. By: Elena Bardasi; Chiara Monfardini
    Abstract: The effect of transition from centrally planned to market economies on female employment is unclear a-priori. Many studies have pointed out that the emergence of labour markets created obstacles to but also new opportunities for women’s employment. A frequently mentioned explanation of the lower female participation during the transition period is the reduction of childcare facilities, which created a major constraint on the participation of women with dependent children. However, the effect of forces of opposite sign should not be overlooked, first of all the household necessity of having two earners during the turbulent transition period. The aim of this paper is to give an empirical assessment on how the transition to a market economy affected the relationship between motherhood and labour force outcomes in Poland. We estimate random effects probit models on two PACO panel datasets covering a four year period before the reform (1987-1990) and a three year period afterwards (1994- 1996). Our findings indicate that during transition young children were much less of a deterrent to the employment probability of their mother than it was before transition.
    Keywords: female employment, fertility, transitional economies, Poland, panel data, PACO database
    JEL: J13 J22 P23 C23
    Date: 2005–05
  6. By: Maria J. Gil-Molto (Loughborough University Economics Department); Claudio A. Piga (Loughborough University Economics Department)
    Abstract: We analyze the determinants of entry and exit in the European Airline Markets in the post-liberalization period. Unlike previous studies, we find that the presence of charter or seasonal operators and the level of quality provided by the incumbents are relevant to explain entry and exit. Differential traits in the main low cost airlines' entry and exit behavior are also analysed.
    Keywords: Entry, Exit, Airlines, Conditional Logit
    JEL: L11 L93
    Date: 2005–12

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