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on Discrete Choice Models |
| By: | Eric Gautier (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); Yuichi Kitamura (Cowles Foundation for Research in Economics - Université Yale - New Haven) |
| Abstract: | Nous considérons dans cet article des modèles à choix binaires et coefficients aléatoires. Le but est d'estimer de manière nonparamétrique la densité du coefficient aléatoire. Il s'agit d'un problème inverse mal posé caractérisé par une transformation intégrale. Un nouvel estimateur de la densité du coefficient aléatoire est proposé. Il est basé sur les développements en séries de Fourier-Laplace sur la sphère. Cette approche permet une étude fine du problème d'identification mais aussi d'obtenir un estimateur par injection ayant une expression explicite et ne nécessitant aucun optimisation numérique. Le nouvel estimateur est donc très facile à obtenir numériquement, tout en étant souple sur le traitement de l'hétérogénéité inobservée. Nous présentons des extensions parmi lesquellesle traitement de coefficients non aléatoires et de modèles avec endogénéité. |
| Date: | 2009–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00403939_v1&r=dcm |
| By: | Helen Scarborough; Michael Burton; Jeff Bennett |
| Abstract: | This paper presents analysis of the decision-making strategies adopted by respondents when confronted with potential environmental policy options that include changes in both aggregate levels of welfare and equity in distribution. The analysis is based on the results of a choice experiment designed to estimate intergenerational distribution preferences. Non-linear welfare functions are employed within a conventional conditional logit framework. The heuristics employed by respondents in the stated preference context provide valuable insights into the application of welfare principles by respondents in determining trade-offs between the potential changes in the well-being of different generations. |
| Keywords: | Intergenerational Equity, Distribution, Choice Modelling |
| Date: | 2009–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:dkn:econwp:eco_2009_02&r=dcm |
| By: | Klaus Moeltner (Department of Resource Economics, University of Nevada, Reno); Robert J. Johnston (Clark University); Randall S. Rosenberger (Oregon State University) |
| Abstract: | This study proposes a new approach to utilize information from existing choice experiments to predict policy outcomes for a transfer setting. Recognizing the difficulties from pooling raw data from experiments with different designs and sub-populations we first re-estimate all underlying Random Utility Models individually, and then combine them in a second stage process to form a weighted mixture density for the generation of policy-relevant welfare estimates. Using data from recent choice experiments on farmland preservation we illustrate that our strategy is more robust to transfer inaccuracies than single-site approaches. The specification of "intelligent" mixture weights will be a fruitful ground for future research in the area of Benefit Transfer. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:unr:wpaper:09-002&r=dcm |
| By: | Raileanu Szeles, Monica (Transylvania University of Brasov, Romania and CEPS/ INSTEAD, Luxembourg); Fusco, Alessio (CEPS/ INSTEAD, Luxembourg and CEMAFI – University of Nice Sophia Antipolis) |
| Abstract: | Item Response Theory (IRT) has recently been proposed as a framework to measure deprivation. It allows deriving a latent measure of deprivation from a set of dichotomous observed items of deprivation and analyzing determinants of deprivation. We investigate further the use of IRT models in the field of deprivation measurement. Firstly, the paper emphasizes the importance of item selection and the Mokken Scale Procedure is applied in order to select the items to be included in the scale of deprivation. Secondly, we apply the one and the two-parameter probit IRT models for dichotomous items on two different sets of items, in order to highlight different empirical results. Finally, we introduce a graphical tool, the Item Characteristic Curve (ICC) and analyse the determinants of deprivation in Luxembourg. The empirical illustration is based on the fourth wave of the Luxembourg socioeconomic panel “Liewen zu Lëtzebuerg” (PSELL-3). |
| Keywords: | item response theory; deprivation ; latent trait ; Mokken Scale ; PSELL3 |
| JEL: | I32 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:irs:iriswp:2009-05&r=dcm |
| By: | Fernandez, Jose; Cataiefe, Guido |
| Abstract: | In a spatial model of voting, a voter's utility for a candidate is a function of ideological distance from the candidate and a candidate's quality. Candidate quality can potentially bias the measure of ideological distance in two ways. First, voters may be more drawn to high quality candidates thereby reducing the ideological distance. Second, a candidate's ideological position is a function of rivalsqualities and his own quality. We derive a theoretical model to sign the direction of both biases analytically. Next, using techniques established in the industrial organization literature, we estimate the model using two sets of instrumental variables. |
| Keywords: | spatial voting; discrete choice; instrumental variables |
| JEL: | C35 D72 |
| Date: | 2009–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16264&r=dcm |
| By: | Xun Tang (Department of Economics, University of Pennsylvania) |
| Abstract: | We address two issues in nonparametric structural analyses of dynamic binary choice processes (DBCP). First, the DBCP is not testable and decision makers’ single-period payoffs (SPP) cannot be identified even when the distribution of unobservable states (USV) is known. Numerical examples show setting SPP from one choice to arbitrary utility levels to identify that from the other can lead to errors in predicting choice probabilities under counterfactual state transitions. We propose two solutions. First, if a data generating process (DGP) has exogenous variations in observable state transitions, the DBCP becomes testable and SPP is identified. Second, exogenous economic restrictions on SPP (such as ranking of states by SPP, or shape restrictions) can be used to recover the identified set of rationalizable counterfactual choice probabilities (RCCP) that are consistent with model restrictions. The other (more challenging) motivating issue is that when the USV distribution is not known, misspecification of the distribution in structural estimation leads to errors in counterfactual predictions. We introduce a simple algorithm based on linear programming to recover sharp bounds on RCCP. This approach exploits the fact that some stochastic restrictions on USV (such as independence from observable states) and economic restrictions on SPP can be represented (without loss of information for counterfactual analyses) as linear restrictions on SPP and distributional parameters of USV. We use numerical examples to illustrate the algorithm and show sizes of identified sets of RCCP can be quite small relative to the outcome space. |
| Keywords: | Dynamic discrete choice models, counterfactual outcomes, rationalizability, non-parametric and semiparametric identification |
| JEL: | C13 C14 C25 |
| Date: | 2009–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:09-022&r=dcm |
| By: | Charles F. Manski |
| Abstract: | Research on collective provision of private goods has focused on distributional considerations. This paper studies a class of problems of decision under uncertainty in which the argument for collective choice emerges from the mathematics of aggregating individual payoffs. Consider decision making when each member of a population has the same objective function, which depends on an unknown state of nature. If agents knew the state of nature, they would make the same decision. However, they may have different beliefs or may use different decision criteria. Hence, they may choose different actions even though they share the same objective. Let the set of feasible actions be convex and the objective function be concave in actions, for all states of nature. Then Jensen's inequality implies that consensus choice of the mean privately-chosen action yields a larger aggregate payoff than does individualistic decision making, in all states of nature. If payoffs are transferable, the aggregate payoff from consensus choice may be allocated to Pareto dominate individualistic decision making, in all states of nature. I develop these ideas. I also use Jensen's inequality to show that a planner with the power to assign actions to the members of the population should not diversify. Finally, I give a version of the collective choice result that holds with consensus choice of the median rather than mean action. |
| JEL: | D7 D81 H42 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15172&r=dcm |