nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2008‒04‒12
six papers chosen by
Philip Yu
Hong Kong University

  1. A Bayesian multinomial probit analysis of voter choice in Chile’s 2005 presidential election By Alvarez, R. Michael; Katz, Gabriel
  2. Policy-based abstention in Brazil’s 2002 presidential election By Katz, Gabriel
  3. Search Costs and Medicare Plan Choice By Ian McCarthy; Rusty Tchernis
  4. Homeownership and the Life Cycle: an Ordered Logit Approach By Bart Capeau; André Decoster; Frederic Vermeulen
  5. Trip chaining: who wins who loses? By André de Palma; Fay Dunkerley; Stef Proost
  6. Labour Market Responses of survival pensioners: estimating a labour supply model and predicting the effect of the reform By André Decoster; Kristian Orsini; Gut Van Camp

  1. By: Alvarez, R. Michael; Katz, Gabriel
    Date: 2007–12
  2. By: Katz, Gabriel
    Date: 2007–12
  3. By: Ian McCarthy (Indiana University Bloomington); Rusty Tchernis (Indiana University Bloomington)
    Abstract: There is increasing evidence suggesting that Medicare beneficiaries do not make fully informed decisions when choosing among alternative Medicare health plans. To the extent that deciphering the intricacies of alternative plans consumes time and money, the Medicare health plan market is one in which search costs may play an important role. To account for this, we split beneficiaries into two groups--those who are informed and those who are uninformed. If uninformed, beneficiaries only use a subset of covariates to compute their maximum utilities, and if informed, they use the full set of variables considered. In a Bayesian framework with Markov Chain Monte Carlo (MCMC) methods, we estimate search cost coefficients based on the minimum and maximum statistics of the search cost distribution, incorporating both horizontal differentiation and information heterogeneities across eligibles. Our results suggest that, conditional on being uninformed, older, higher income beneficiaries with lower self-reported health status are more likely to utilize easier access to information.
    Keywords: Search, Medicare Health Plan Choice, Discrete Choice Models, Bayesian Methods
    JEL: C11 C21 D21 D43 M31
    Date: 2008–04
  4. By: Bart Capeau; André Decoster; Frederic Vermeulen
    Abstract: This paper presents an ordered logit approach to model the optimal timing of buying a house in the life cycle. The model is applied to three recent Belgian household budget surveys. We find that households postpone homeownership or choose to be lifelong tenant due to an increase of the transaction tax rate, the real interest rate on mortgages and an indicator for the evolution of real house prices. Expenditures on nondurables, on the contrary, have a positive impact on (early) homeownership.
    Keywords: homeownership, life cycle, transaction tax.
    JEL: D12 R21
    Date: 2008–03
  5. By: André de Palma; Fay Dunkerley; Stef Proost
    Abstract: In this paper we study how trip chaining affects the pricing and equilibrium number of firms. We use a monopolistic competition model where firms offer differentiated products as well as differentiated jobs to households who are all located at some distance from the firms. Trip chaining means that shopping and commuting can be combined in one trip. The symmetric equilibriums with and without the option of trip chaining are compared. We show analytically that introducing the trip chaining option can, in the short run, only decrease the profit margin of the firms and will increase welfare. The welfare gains are however smaller than the transport cost savings. In the long run, with free entry, the number of firms decreases but welfare with trip chaining possible is still higher than when it is excluded. A numerical illustration gives orders of magnitude of the different effects.
    Keywords: trip chaining, discrete choice model, general equilibrium model, imperfect competition, wage competition.
    JEL: D43 L13 R3
    Date: 2008–03
  6. By: André Decoster; Kristian Orsini; Gut Van Camp
    Abstract: In this paper we use a sample of administrative data coming from the `Dataware-house labour market and social protection' and the microsimulation model MIMOSIS to assess the labour supply effects of a reform of the rules for cumulating labour income with survival pension as proposed in the Generations Pact. In a first step we estimate a standard discrete choice labour supply model for several sub groups. Subsequently we model the proposed reform in the tax and benefit rules and we predict the change in desired labour supply of the targeted group. The reform has a significant positive effect on the labour supply of widows, but the effects are quite weak amongst the survivor pensioner with very low benefit, i.e. the group that was originally thought to benefit the most from the reform.
    Keywords: Tax-benefit Systems { Microsimulation { Household Labour Supply
    JEL: C25 D31 H21 H23 H24 H31 J22
    Date: 2008–03

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