nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2008‒09‒05
four papers chosen by
Philip Yu
Hong Kong University

  1. Preference reversals and probabilistic choice By Pavlo R. Blavatskyy
  2. Revealed Preference Indicators for Fuzzy Choice Functions By Georgescu, Irina
  3. Moving Across Borders: Who is Willing to Migrate or to Commute? By Peter Huber; Klaus Nowotny
  4. Welfare Reform and Children's Short-Run Attainments: A Structural Approach By Chyi, Hau; Ozturk, Orgul

  1. By: Pavlo R. Blavatskyy
    Abstract: Preference reversals occur when different (but formally equivalent) elicitation methods reveal conflicting preferences over two alternatives. This paper shows that when people have fuzzy preferences i.e. when they choose in a probabilistic manner, their observed decisions can generate systematic preference reversals. A simple model of probabilistic choice and valuation can account for a higher incidence of standard (nonstandard) preference reversals for certainty (probability) equivalents and it can also rationalize the existence of strong reversals. An important methodological contribution of the paper is a new definition of a probabilistic certainty/probability equivalent of a risky lottery.
    Keywords: Preference reversal, probabilistic choice, certainty equivalent, probability equivalent, valuation
    JEL: D01 D80 D81 C91
    Date: 2008–08
  2. By: Georgescu, Irina
    Keywords: Revealed Preference, Fuzzy, Choice Function
    Date: 2008
  3. By: Peter Huber (WIFO); Klaus Nowotny (WIFO)
    Abstract: This paper analyses the willingness to commute and migrate across borders. We focus on differences in the effects of individual characteristics on the willingness to migrate and the willingness to commute. Based on a random utility model we estimate a multinomial probit regression using individual level data on migration and commuting plans in regions of the Czech Republic, Hungary, and Slovakia bordering on Austria. We find that indirect costs of mobility have a smaller impact on the probability of being willing to commute. Variables associated with potential earnings have mostly low marginal effects and no evidence of selection by education.
    Keywords: willingness to migrate, willingness to commute, cross-border commuting, multinomial probit regression
    Date: 2008–06–11
  4. By: Chyi, Hau; Ozturk, Orgul
    Abstract: In this paper, we develop a dynamic structural model of single mothers' work and welfare participation decisions while their children are young. This model is used to measure the effects of mothers' decisions on short run attainments of the children of NLSY 79. Using PIAT Math test score as a measure of attainment, we find that both single mothers' work and welfare use in the first five years of their children's lives have a positive effect on children's outcomes, but this effect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the effect is negative if a child has more than median initial ability. Furthermore, we find that the work requirement reduces a single mother's use of welfare. However, the net effect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes.
    Keywords: Welfare reform; childhood cognitive ability; female work; dynamic choice model; maximum likelihood
    JEL: J22 I38 J18
    Date: 2006

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