nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2007‒02‒17
eight papers chosen by
Philip Yu
Hong Kong University

  1. Persistence of Innovation: Stylised Facts and Panel Data Evidence By Bettina Peters
  2. Why and where do headquarters move? By Strauss-Kahn, Vanessa; Vives, Xavier
  3. Choice of Fields of Study of Canadian University Graduates: The Role of Gender and their Parents’ Education By Brahim Boudarbat; Claude Montmarquette
  4. Intra-household Gender Disparities in Children’s Medical Care before Death in India By Abay Asfaw; Stephan Klasen; Francesca Lamanna
  5. European consumers’ attitudes on services of general interest: accessibility, price and quality By Carlo Vittorio FIORIO; Massimo FLORIO; Silvia SALINI
  6. Acyclic domains of linear orders : a survey. By Bernard Monjardet
  7. The use of limited dependent variable techniques in strategy research: assessment and critique By Wiersema, M.; Bowen, H.P.
  8. Talks, financial operations or both? Generalizing central banks’ FX reaction functions By Oscar Bernal; Jean-Yves Gnabo

  1. By: Bettina Peters
    Abstract: This paper investigates whether firms innovate persistently or discontinuously over time using an innovation panel data set on German manufacturing and service firms for the period 1994–2002. It turns out that innovation behaviour is permanent at the firm–level to a very large extent. Using a dynamic random effects discrete choice model and a new estimator recently proposed by Wooldrigde (2005), I further shed some light on the driving forces for this phenomenon. The econometric results show that past innovation experience is an important determinant for manufacturing as well as for service sector firms, and hence confirm the hypothesis of true state dependence. In addition, the results highlight the important role of knowledge provided by skilled employees and unobserved individual heterogeneity in explaining the persistence of innovation.
    Keywords: Innovation; persistence; state dependence; unobserved heterogeneity; dynamic random effects panel probit model
    JEL: O31 C23 C25 L20
    Date: 2006
  2. By: Strauss-Kahn, Vanessa (INSEAD); Vives, Xavier (IESE Business School)
    Abstract: This paper analyzes decisions regarding the location of headquarters in the U.S. for the period 1996-2001. Using a unique firm-level database of about 30,000 U.S. headquarters, we study the firm and location-specific characteristics of headquarters that relocated over that period. Headquarters are increasingly concentrated in medium-sized service-oriented metropolitan areas, and the rate of relocation is significant (5% a year). Larger (in terms of sales) and younger headquarters tend to relocate more often, as do larger (in terms of the number of headquarters) and foreign firms, and firms that are the outcome of a merger. Headquarters relocate to metropolitan areas with good airport facilities with a dramatic impact, low corporate taxes, low average wages, high level of business services, same industry specialization, and agglomeration of headquarters in the same sector of activity, with all agglomeration variables having an important and significant impact.
    Keywords: Agglomeration externalities; business services; communication costs; congestion; corporate history; mergers; nested logit;
    Date: 2006–02–09
  3. By: Brahim Boudarbat (Université de Montréal,CIRANO and IZA); Claude Montmarquette (Université de Montréal and CIRANO)
    Abstract: This paper examines the determinants of the choice of field of study by university students using data from the Canadian National Graduate Survey. The sample of 18,708 graduates holding a Bachelor degree is interesting in itself knowing that these students completed their study and thus represent a pool of high quality individuals. What impact expected postgraduation lifetime earnings have in choosing their field of study respectively to their non pecuniary preferences? Are these individuals less or more influenced by monetary incentives on their decision than was found in previous literature with samples of university students not all completing their studies successfully? Unlike existing studies, we account for the probability that students will be able to find employment related to their field of study when evaluating lifetime earnings after graduation. The parameters that drive students’ choices of fields of study are estimated using a mixed multinomial logit model applied to seven broadly defined fields. Results indicate that the weight put by a student on initial earnings and earnings’ rate of growth earnings depends upon the education level of the parent of the same gender. Surprisingly, lifetime earnings have no statistically significant impact when the parent of the same gender as the student has a university education. Results show that men are, in general, more sensitive than women to initial income variations, whilst women are more sensitive than men to the earnings’ rate of growth variations. Marital status, enrolment status and the vocation identified with each field of study are influential factors in students’ choices. From a policy perspective, a substantial increase in lifetime earnings, while all other factors remain constant, would be necessary to draw students into fields of study they are not inclined to choose initially.
    Keywords: Canada, university fields of study, expected lifetime earnings, mixed multinomial logit model, parents’ education
    JEL: J24 C35
    Date: 2007–01
  4. By: Abay Asfaw (International Food Policy Research Institute); Stephan Klasen (Göttingen University and IZA); Francesca Lamanna (Göttingen University)
    Abstract: The excess female mortality in India and other South Asian countries is no longer contentious. Less known are the reasons for such excess female mortality in the country. In this study, we argue that intra-household gender-discrimination in receipt of medical attention can be one of the most important factors for the unbalanced sex ratio in the country. The 52nd Indian National Sample Survey, which collected for the first time detailed verbal autopsies of deceased persons, is used in the analysis. Place of death, which indicates whether a person get medical help immediately before her/his death, is used as a health indicator variable. The multinomial logit results show that keeping all other factors constant, girls are 1.7 percent less likely to die in hospital than their brothers. The coefficients of different interaction variables also reveal that the probability of infant and very young girls with live female siblings to die in hospital is extremely low. The robustness of the results is also checked using different indicators. The results confirm that girls are highly discriminated in access to hospital treatment and in the number of times being hospitalized before their death compared to boys. Therefore, in addition to the current effort of the government to control sex-selective abortions, efforts should be made to reduce the current intra-household gender-disparities in getting medical care at least for life threatening illnesses.
    Keywords: gender discrimination, access to health care, place of death, India
    JEL: D63 I12 J16
    Date: 2007–01
  5. By: Carlo Vittorio FIORIO; Massimo FLORIO; Silvia SALINI
    Abstract: The research question addressed by this paper is a simple one: are European consumers happy with the services provided by the utilities after two decades of reforms? We focus on electricity, gas, water, telephone in the EU 15 Member States. The variables we analyse are consumers’ satisfaction with accessibility, price, and quality, as reported in three waves of Eurobarometer survey, 2000-2002-2004 , comprising around 47,000 observations. We use ordered logit models to analyze the impact of privatization and regulatory reforms, controlling for individual and country characteristics. Our results do not support a systematic association between consumers’ satisfaction and the standard reform package of privatization, vertical disintegration, liberalization
    Keywords: Consumers’ satisfaction, gas, electricity, telephone, water, Eurobarometer
    JEL: L94 L95 L96 L50
    Date: 2007–02
  6. By: Bernard Monjardet (Centre d'Economie de la Sorbonne)
    Abstract: Among the many significant contributions of Fishburn to social choice theory some have borne on what he has called “acyclic sets”, i.e. these sets of linear orders where majority rule applies without “Condorcet effect” (majority relation never has cycles). Search for large such domains is a fascinating topic. I review the works in this field and in particular a recent one allowing to show the connections between some of them unrelated up to now.
    Keywords: Acyclic set, alternating scheme, distributive lattice, effet Condorcet, maximal chain, permutoedre lattice, weak Bruhat order, value restriction.
    Date: 2006–12
  7. By: Wiersema, M.; Bowen, H.P.
    Abstract: Strategy researchers are increasingly turning their attention from examining the implications of strategic choices on firm performance to examining the factors that determine strategic choice at the firm level. This shift of research orientation has meant that researchers are increasingly faced with a limited dependent variable (LDV) that takes a limited number of usually discrete values. In such cases researchers typically use discrete LDV methods such as Logit or Probit and, in fact, the use of such methods has increased significantly in recent years. Despite their growing popularity, there appear to be widespread problems in the application, reporting, and interpretation of LDV methods and their results within the literature. We examined the use of LDV methods in 50 papers published since 2002 in two top-tier journals that are primary outlets for empirical strategy research (Strategic Management Journal and Academy of Management Journal). One particularly troublesome issue is the finding that researchers fail to correctly analyze moderating hypotheses, a situation that likely stems from a lack of familiarity with the nonlinear nature of LDV models. Based on our review of the literature, this paper provides an assessment of the use of the most common LDV methods, highlights problems and inconsistencies regarding their use and interpretation, and provides guidelines and suggestions for researchers seeking to use LDV statistical techniques.
    Keywords: empirical methods, limited dependent variable, strategy research
    Date: 2006–10–04
  8. By: Oscar Bernal (DULBEA, Free University of Brussels); Jean-Yves Gnabo (University of Namur)
    Abstract: This paper generalizes central banks’ FX interventions reaction functions to include oral interventions alongside actual ones. Using Japanese data for the 1991-2004 period, we estimate an ordered probit explaining the occurrence of each type of intervention and evaluating the extent to which oral and actual interventions are substitutes or complements. Our results indicate that monetary authorities tend to adopt progressively stronger measures as the exchange rate behaves in an increasingly unfavorable way. This suggests that words and acts are used as complements only in extreme cases.
    Keywords: Central banks; Foreign exchange market; Interventions; Communication policy
    JEL: E58 F31 G15
    Date: 2007–02

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