nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2006‒03‒25
eight papers chosen by
Philip Yu
Hong Kong University

  1. Farmer willingness to pay for seed-related information By Horna, J. Daniela; Smale, Melinda; von Oppen, Matthias
  2. Explorations of the Effect of Experience on Preferences: Two Health-Care Case Studies By Einat Neuman; Shoshana Neuman
  3. 'Making Work Pay' in a Rationed Labour Market By Olivier Bargain; Marco Caliendo; Peter Haan; Kristian Orsini
  4. Social Choice: Recent Developments By BOSSERT, Walter; WEYMARK, J.A.
  5. Consistent Relations By BOSSERT, Walter
  6. Respecting Priorities when Assigning Students to Schools By EHLERS, Lars
  7. Public Decisions: Solidarity and the Status Quo By GORDON, Sidartha
  8. The comparative effectiveness of public policies to fight motherhood-induced employment penalties and decreasing fertility in the former eu-15 By Jérôme de Henau; Danièle Meulders; Sile O'Dorchai

  1. By: Horna, J. Daniela; Smale, Melinda; von Oppen, Matthias
    Abstract: "A typical private good is defined by its excludability and rivalry characteristics. Information embodied in a technology might not generate rivalry among its users. By contrast, excludability is certainly a characteristic of this kind of information and its delivery can generate incentives for private participation. This study examines farmers' preferences for seed of new rice varieties and their willingness to pay for seed-related information in villages of Nigeria and Benin. Conjoint analysis is used to estimate the structure of farmers' preferences for rice seed given a set of alternatives. Farmers are considered to be consumers of seed as a production input, preferring one variety over another based on the utility they obtain from its attributes, which depends on their own social and economic characteristics, including whether or not they sell rice. Contingent methods are used to elicit preferences and willingness to pay (WTP) for rice seed. The marginal values of attributes, with and without information about the seed, are estimated with an ordered probit regression. WTP for information is derived from the analysis of WTP for rice seed. The results have implications for the best way to finance research and extension services in the areas of intervention, particularly for new rice varieties. " Authors' Abstract
    Keywords: Willingnes to pay (WTP) ,seed-related information ,conjoint analysis ,rice attributes ,farmers' preferences ,technology ,
    Date: 2005
  2. By: Einat Neuman (Academic College of Tel Aviv-Yaffo); Shoshana Neuman (Bar-Ilan University, CEPR and IZA Bonn)
    Abstract: The standard assumption in economic theory is that preferences are stable. In particular, they are not changed as a result of experience with the good/service/event. Behavioral scientists have challenged this assumption and claimed (providing evidence) that preferences are constantly changing when experience is accumulated. This paper tests the effect of experience on preferences for attributes of health-care events. We are using two very different samples and a methodology that facilitates the estimation of marginal utilities of various attributes of a composite non-traded health-care service. Discrete Choice Experimental design is employed for the analysis of samples of (1) women who gave birth, and (2) women who were diagnosed with breast cancer. For each group we had information on experience. In the case of women who gave birth, the sample was decomposed into 3 sub-samples: pregnant women with their first child (no experience); women after one delivery (single experience); and mothers after more than one delivery (multiple experience). Preferences of the 3 sub-groups have then been compared. The breast cancer patients reported the number of chemotherapy/radiation treatments they have already received, thus enabling the construction of an experience variable and testing for the effect of experience on preferences. The basic finding is that preferences for health-care attributes are significantly changed as a result of experience with the health event. However, the amount of experience is irrelevant.
    Keywords: preferences, experience, Discrete Choice Experiment, health-care, delivery, breast cancer
    JEL: D12 I19
    Date: 2006–03
  3. By: Olivier Bargain (IZA Bonn); Marco Caliendo (DIW Berlin and IZA Bonn); Peter Haan (DIW Berlin); Kristian Orsini (K.U. Leuven)
    Abstract: We assess the labour supply effects of two ‘making work pay' reforms in Germany. We provide evidence in favour of policies that distinguish between low effort and low productivity by targeting individuals with low wages rather than individuals with low earnings. In assessing the policies we account for demand-side constraints by using a double-hurdle model. We identify and decompose the potential bias of labour supply elasticities derived in standard unconstrained models. Although this bias is not significant when assessing policies which mainly target voluntarily unemployed workers (typically secondary earners), it is substantial for policies which affect groups with high shares of involuntary unemployment.
    Keywords: tax-benefit systems, microsimulation, household labour supply, multinomial logit, involuntary unemployment, double-hurdle
    JEL: C25 C52 H31 J22
    Date: 2006–03
  4. By: BOSSERT, Walter; WEYMARK, J.A.
    Abstract: In the past quarter century, there has been a dramatic shift of focus in social choice theory, with structured sets of alternatives and restricted domains of the sort encountered in economic problems coming to the fore. This article provides an overview of some of the recent contributions to four topics in normative social choice theory in which economic modelling has played a prominent role: Arrovian social choice theory on economic domains, variable-population social choice, strategy-proof social choice, and axiomatic models of resource allocation.
    Keywords: Social Choice, Arrow’s Theorem, Gibbard–Satterthwaite Theorem, Strategy-oofness, Fairness, Axiomatic Models of Resource Allocation
    JEL: D63
    Date: 2006
  5. By: BOSSERT, Walter
    Abstract: Consistency, a natural weakening of transitivity introduced in a seminal contribution by Suzumura (1976b), has turned out to be an interesting and promising concept in a variety of areas within economic theory. This paper summarizes its recent applications and provides some new observations in welfarist social choice and in population ethics. In particular, it is shown that the conclusion of the welfarism theorem remains true if transitivity is replaced by consistency and that an impossibility result in variable-population social-choice theory turns into a possibility if transitivity is weakened to consistency.
    Keywords: Consistency, Ordering Extensions, Rationalizability, Welfarism, Polation Ethics
    JEL: D63 D71
    Date: 2006
  6. By: EHLERS, Lars
    Abstract: We consider the problem of assigning students to schools on the basis of priorities. Students are allowed to have equal priority at a school. We characterize the efficient rules which weakly/strongly respect students’ priorities. When priority orderings are not strict, it is not possible to simply break ties in a fixed manner. All possibilities of resolving the indifferences need to be considered. Neither the deferred acceptance algorithm nor the top trading cycle algorithm successfully solve the problem of efficiently assigning the students to schools whereas a modified version of the deferred acceptance algorithm might. In this version tie breaking depends on students’ preferences.
    Keywords: School Choice, Equal Priority, Tie Breaking
    Date: 2006
  7. By: GORDON, Sidartha
    Abstract: A public decision model specifies a fixed set of alternatives A, a variable population, and a fixed set of admissible preferences over A, common to all agents. We study the implications, for any social choice function, of the principle of solidarity, in the class of all such models. The principle says that when the environment changes, all agents not responsible for the change should all be affected in the same direction: either all weakly win, or all weakly lose. We consider two formulations of this principle: population-monotonicity (Thomson, 1983); and replacement-domination (Moulin, 1987). Under weak additional requirements, but regardless of the domain of preferences considered, each of the two conditions implies (i) coalition-strategy-proofness; (ii) that the choice only depends on the set of preferences that are present in the society and not on the labels of agents, nor on the number of agents having a particular preference; (iii) that there exists a status quo point, i.e. an alternative always weakly Pareto-dominated by the alternative selected by the rule. We also prove that replacement-domination is generally at least as strong as population-monotonicity.
    Keywords: Polation-monotonicity, reacement-domination, solidarity, strategy-oofness, coalition-strategy-oofness, blic decision, status quo
    Date: 2006
  8. By: Jérôme de Henau (DULBEA, Université libre de Bruxelles, Brussels); Danièle Meulders (DULBEA, Université libre de Bruxelles, Brussels); Sile O'Dorchai (DULBEA, Université libre de Bruxelles, Brussels)
    Abstract: In this paper we aim to study and compare the countries of the former EU-15 in terms of the difference in labour market conditions between mothers and non-mothers and we look at how public policies can be designed in order to minimise the employment penalties associated with the presence of young children and thus promote parenthood by working women. As women choose to take part in paid employment, fertility rates will depend on their possibilities to combine employment and motherhood. As a result, the motherhood-induced employment penalties discussed in this paper as well as the role of public policies should be given priority attention by politicians and policy-makers. Firstly, in this paper we start out from a multinomial logit model to analyse motherhood-induced employment gaps in the EU-15. Then, various decomposition techniques (the method of recycled prediction and the Oaxaca (1973) and Blinder (1973) technique adapted to the non-linear case) are applied to the computed gross FTE employment gaps between mothers and non-mothers to isolate the net employment effect associated with the presence of children from that of differences in characteristics between mothers and non-mothers. Special attention is also given to the specific role of education to contain the negative labour market consequences that derive from the presence of young children. It seems that differences in characteristics such as age, education and non labour personal income do not influence a lot the difference in employment status. Secondly, we use an OLS regression to confront motherhood-induced employment penalties with selfconstructed country-specific indicators of child policies, used as explanatory variables, in order to test the impact and effectiveness of policies of different design and generosity on these employment gaps that separate mothers of young children from non-mothers and mothers with grown up children. We round off our analysis by presenting a new typology and country-specific overview of the adjustment mechanisms applied by career-pursuing mothers on the labour market as well as of the supportiveness of different child policies. In the conclusion, we carefully review the main results of this research, advance a number of policy recommendations and suggest interesting avenues for future research.
    Keywords: labour market conditions, social policies, fertility, postponement of maternity, dual-earner couples, welfare states, synthetic indicators.
    JEL: C43 J13 J21
    Date: 2006–02

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