nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2006‒05‒27
eight papers chosen by
Philip Yu
Hong Kong University

  1. Maximum Likelihood Estimation of Endogenous Switching And Sample Selection Models for Binary, Count, And Ordinal Variables By Alfonso Miranda; Sophia Rabe-Hesketh
  2. Green Cards and the Location Choices of Immigrants in the United States, 1971-2000 By David A. Jaeger
  3. The choice at the checkout: quantifying demand across payment instruments By Ron Borzekowski; Elizabeth K. Kiser
  4. The duration of foreclosures in the subprime mortgage market: a competing risks model with mixing By Anthony Pennington-Cross
  5. Restrictions verticales et externalité intra-marque en matière d'effort promotionnel Un test empirique sur données françaises By Magali Chaudey; Muriel Fadairo
  6. Knowledge, Profitability and Exit of German Car Manufacturing Firms By Jens J. Krüger; Kristina Dreßler
  7. Son Preference And Its Determinants In Rural India: An Analysis Based On A Composite Measure of Gender Bias By Manisha Chakrabarty
  8. Child Care Costs and the Employment Status of Married Australian Mothers By Anu Rammohan; Stephen Whelan

  1. By: Alfonso Miranda (Department of Economics, Keele,); Sophia Rabe-Hesketh (Graduate Schoolof Education,)
    Abstract: Studying behaviour in economics, sociology, and statistics often involves fitting models in which the response variable depends on a dummy variable (also known as a regime switch variable) or in which the response variable is observed only if a particular selection condition is met. In either case, standard regression techniques deliver inconsistent estimators if unobserved factors that affect the response are correlated with unobserved factors that affect the switching or selection variable. Consistent estimators can be obtained by maximum likelihood estimation of a joint model of the outcome and switching or selection variable. This paper describes a ‘wrapper’ program, ssm, that calls gllamm (Rabe-Hesketh et al. 2004a) to fit such models. The wrapper accepts data in a simple structure, has a straightforward syntax, and reports output in a manner that is easily interpretable. One important feature of ssm is that the log-likelihood can be evaluated using adaptive quadrature (Rabe- Hesketh and Skrondal 2002; Rabe-Hesketh et al. 2005)
    Keywords: Endogenous switching, sample selection, binary variable, count data, ordinal variable, probit, poisson regression, adaptive quadrature, gllamm, wrapper, ssm.
    JEL: C13 C31 C35 C87 I12
    Date: 2005–12
  2. By: David A. Jaeger (Department of Economics, College of William and Mary)
    Abstract: This paper documents where immigrants who enter the U.S. with different types of visas ("green cards") choose to live initially and what determines those location choices. Using population data on immigrants from the Immigration and Naturalization Service from 1971 to 2000, matched to data on state characteristics from the Integrated Public Use Microsamples of the U.S. Census, I estimate conditional logit models with the 48 contiguous U.S. states as the choice set. Like previous researchers, I estimate that immigrants have a higher probability of moving to states where individuals from their region of birth represent a larger share of the state population, with relatives of legal permanent residents responding most to this factor. I also find that, in general, immigrants in all admission categories respond to labor market conditions when choosing where to live, but that these effects were the largest for male employment-based immigrants and, surprisingly, refugees.
    Keywords: admission categories, immigrants, settlement patterns, conditional logit
    JEL: J61 J18 C35
    Date: 2006–05–23
  3. By: Ron Borzekowski; Elizabeth K. Kiser
    Abstract: Dramatic changes have occurred in the U.S. payment system over the past two decades, most notably an explosion in electronic card-based payments. Not surprisingly, this shift has been accompanied by a series of policy debates, all of which hinge critically on understanding consumer behavior at the point of sale. Using a new nationally representative survey, we transform consumers' responses to open-ended questions on reasons for using debit cards to estimate a characteristics-based discrete-choice demand model that includes debit cards, cash, checks, and credit cards. Market shares computed using this model line up well with aggregate shares from other sources. The estimates are used to conduct several counterfactual experiments that predict consumer responses to alternative payment choices. We find that consumers respond strongly to elapsed time at the checkout counter and to whether the payment instrument draws from debt or liquidity. In addition, substitution patterns vary substantially with demographics. New "contactless" payment methods designed to replace debit cards are predicted to draw market share from cash, checks, and credit, in that order. Finally, although we find an effect of cohort on payment technology adoption, this effect is unlikely to diminish substantially over a 10-year horizon.
    Date: 2006
  4. By: Anthony Pennington-Cross
    Abstract: This paper examines what happens to mortgages in the subprime mortgage market once foreclosure proceeding are initiated. A multinominial logit model that allows for the interdependence of the possible outcomes or risks (cure, partial cure, paid off, and real estate owned) through the correlation of associated unobserved heterogeneities is estimated. The results show that the duration of foreclosures is impacted by many factors including contemporaneous housing market conditions, the prior performance of the loan (prior delinquency), and the state-level legal environment.
    Keywords: Mortgages
    Date: 2006
  5. By: Magali Chaudey (CREUSET (EA 3724) - Centre de Recherche Economique de l'Université de Saint Etienne - [Université Jean Monnet - Saint-Etienne]); Muriel Fadairo (CREUSET (EA 3724) - Centre de Recherche Economique de l'Université de Saint Etienne - [Université Jean Monnet - Saint-Etienne])
    Abstract: Les restrictions verticales se définissent comme des clauses contractuelles imposées par un producteur, qui limitent la liberté d'action d'un ou plusieurs distributeurs. L'économétrie des contrats représente une voie de recherche intéressante pour analyser ces accords, en particulier pour mettre en évidence ce qui les motive. Elle permet de repérer les situations dans lesquelles les contraintes sont mises en place dans le but de neutraliser les externalités relatives aux relations fournisseurs-distributeurs, conformément aux enseignements de la théorie des incitations et du paradigme principal-agent. Cet article reprend les principales justifications théoriques concernant l'utilisation de restrictions verticales, puis développe un test économétrique sur un échantillon de 439 réseaux français. Les résultats sont en partie compatibles avec l'argument théorique.
    Keywords: Restrictions verticales; économétrie des contrats; externalité de publicité; probit ordonné;Vertical restraints; contract econometrics; advertising externality; ordered probit.
    Date: 2006–05–22
  6. By: Jens J. Krüger (University of Jena, Faculty of Economics); Kristina Dreßler (University of Jena, Faculty of Economics)
    Abstract: In this paper the profitability of German car manufacturing firms is related to different indicators for the knowledge incorporated in the firms since the birth of the industry in 1886. The analysis is performed with an ordered probit model, where information about the kind of exit of the firms is exploited to construct a latent profitability variable. Knowledge is represented by the number of patents, learning-by-doing and entrepreneurial experience before entry. The results show that knowledge is significantly positively related to firm profitability and that each of the three knowledge forms exerts an independent effect.
    Keywords: firms profitability, exit modes, knowledge, ordered choice, automobile industry
    JEL: L10 L21 L62 O33 C25
    Date: 2006–05–20
  7. By: Manisha Chakrabarty (Keele University, Department of Economics)
    Abstract: This paper examines the issue of gender bias in a broader context by constructing a multidimensional index of deprivation of daughters. Using the recently available World Bank LSMS data on the two most populated and poverty ridden states of India, we apply ordered logit regression analysis to investigate the determinants of degree of son preference based on this index of gender bias. It is observed that economic betterment surely affects negatively this broad measure of gender bias in addition to mother’s education. Yet the effect of the agricultural livelihood increases the incidence of bias. Another finding is in relation to the effectiveness of basic education and health facilities like schools and health centers rather than any specific Government anti-poverty or targeted development programmes.
    Keywords: Gender Bias, Principal Component Analysis, Ordered Logit Regression
    JEL: C25 D63 J13 J16
    Date: 2005–02
  8. By: Anu Rammohan; Stephen Whelan
    Abstract: Using data from the HILDA (Household Income and Labour Dynamics), this paper examines the implications of child care costs on maternal employment status by distinguishing between full-time and part-time work. Our empirical approach uses an ordered probit model taking into account the endogeneity associated with both wages and child care costs. Results indicate that child care costs have a statistically insignificant effect on the decision to work either full time or part time. Moreover, the reported elasticities of part-time and full-time work with respect to child care costs are relatively low. This suggests that the significant subsidies paid to users of child care may have a limited role in increasing the labour market activity of married mothers.
    Keywords: female labour supply, child care, part-time, full-time
    JEL: D13 J12 J13 J16
    Date: 2006–04

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