nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2007‒05‒26
five papers chosen by
Philip Yu
Hong Kong University

  1. A Random Parameter Logit model for modeling Health Care Provider Choice in Bolivia By Canaviri, Jose
  2. Intervention Policy of the BoJ: a Unified Approach. By Michel Beine; Oscar Bernal; Jean-Yves Gnabo; Christelle Lecourt
  3. Using Stated Preferences Data to Analyze Preferences for Full and Partial Retirement By Arthur van Soest; Arie Kapteyn; Julie Zissimopoulos
  4. How Sustainable are Sustainable Development Programs? The Case of the Sloping Land Conversion Program in China By Andreas Kontoleon; Pauline Grosjean
  5. Assessing the non-timber value of old-growth forests in Sweden By Broberg, Thomas

  1. By: Canaviri, Jose
    Abstract: In this paper we model health care provider choice in Bolivia with a Random Parameter Logit (RPL) using MECOVI data during the period 1999 and 2000. To our knowledge this is the first time that a RPL is used for modeling health care provider choice in Bolivia. We found that price and income are determinants of the decision choice of health care provider. Increasing government prices or fees shift the demand from government to private health facilities for children and women. In addition, women are more sensitive than children and adults to changes in price and income. The perception of Quality is significant just for private health facilities except for children. Finally, people would rather private instead of government facilities and self care treatment when they are ill.
    Keywords: Random Parameter Logit; Government and Private Health Facilities; Quality; Prices or User Fees.
    JEL: I19 I18 I11
    Date: 2007–01
  2. By: Michel Beine (CREFI-LSF, Luxembourg University, Luxembourg School of Finance, Luxembourg and DULBEA, Université Libre de Bruxelles, Brussels.); Oscar Bernal (DULBEA, Université Libre de Bruxelles, Brussels.); Jean-Yves Gnabo (; Christelle Lecourt (FUNDP, Namur)
    Abstract: Intervening in the FX market implies a complex decision process for central banks. Monetary authorities have to decide whether to intervene or not, and if so, when and how. Since the successive steps of this procedure are likely to be highly interdependent, we adopt a nested logit approach to capture their relationships and to characterize the prominent features of the various steps of the intervention decision. Our findings shed some light on the determinants of central bank interventions, on the so-called secrecy puzzle and on the identification of the variables influencing the detection of foreign exchange transactions by market traders.
    Keywords: FX intervention, Secrecy Puzzle, Market Detection, Nested Logit.
    JEL: E58 F31 G15
    Date: 2007–03
  3. By: Arthur van Soest (RAND, Tilburg University and IZA); Arie Kapteyn (RAND and IZA); Julie Zissimopoulos (RAND)
    Abstract: Structural models explaining retirement decisions of individuals or households in an intertemporal setting are typically hard to estimate using data on actual retirement decisions, since choice sets are for a large part unobserved by the researcher. This paper describes an experiment in which both perceived retirement opportunities and preferences for retirement are measured. For the latter, respondents evaluate how attractive they find a number of hypothetical, simplified, retirement trajectories involving early retirement, late retirement, and gradual retirement, each with its own corresponding income path. The questions were fielded in the Dutch CentERpanel. The answers are used to estimate a stylized structural life-cycle model of retirement preferences. The results suggest that, for example, many respondents could be convinced to work part-time after age 65 before retiring completely at age 70 for a reasonable financial compensation. Simulations combining the information on perceived opportunities with estimated preferences illustrate the importance of employer imposed restrictions on retirement and the scope for increasing labor force participation of the elderly by creating opportunities for gradual retirement.
    Keywords: replacement rates, ratings, gradual retirement
    JEL: C81 J26
    Date: 2007–05
  4. By: Andreas Kontoleon (Department of Land Economy, University of Cambridge, UK); Pauline Grosjean (LERNA, University of Toulouse and European Bank for Reconstruction and Development, France)
    Abstract: This paper undertakes a direct comprehensive assessment of the long-run sustainability of one the world’s largest sustainable development programs, the Slopping Land Conversion Program (SLCP) in China under different plausible post-SLCP scenarios. The analysis is based on farmer contingent behavior post-program land and labor decisions as well as choice experiment data. Our econometric results highlight the main obstacles to the program’s sustainability, which include specific shortfalls in program implementation as well as certain institutional constraints such as tenure insecurity, poor land renting rights, limited access to credit and limited land management rights.
    Keywords: sustainable development programs, sustainability, recursive probit, choice modeling, Asia, China
    JEL: Q2 Q4 R4
    Date: 2007
  5. By: Broberg, Thomas (Department of Economics, Umeå University)
    Abstract: This paper estimates the public benefit of preserving 126 000 hectares of old-growth forest in the sub-mountainous region of Sweden through contingent valuation. The primary benefit of this in-situ conservation of biodiversity is the forest’s relative diversity and richness, which provides important habitat for threatened species. Thus, benefits arise predominantly from nonuse values. We find that a majority of the Swedish population is unwilling to contribute financially to the preservation project (median WTP equals zero). The estimated mean WTP is SEK 300, implying an aggregate benefit of SEK 9 billion. We estimate two types of valuation functions in order to reject the hypothesis that respondents state random numbers as their WTP. Firstly, a binary logit model indicates that variables related to a respondent’s education level, income level and concern about the environment are positively correlated with the likelihood of supporting the preservation project, while being a male and having an anti-environmental attitude towards public expenditures are negatively correlated. After controlling for whether or not locals are employed in forest-related industries, we find that locals, in general, are more likely to have a positive WTP. Secondly, we estimate a valuation function conditioned on respondents with a positive WTP and find that the size of their contribution is explained by income, general concern about the environment, and the motive underlying their valuation (e.g., use versus nonuse). No differences between locals and non-locals were found.
    Keywords: contingent valuation; willingness to pay; social benefit; nonuse values; non-timber value; old-growth forest; preservation; conservation
    JEL: Q20 Q23 Q26 Q28 Q38
    Date: 2007–05–16

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