nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2010‒02‒05
four papers chosen by
Philip Yu
Hong Kong University

  1. High-Speed Inter-City Transport System in Japan Past, Present and the Future By Katsuhiro Yamaguchi
  2. Low-wage employment versus unemployment: which one provides better prospects for women? By Mosthaf, Alexander; Schank, Thorsten; Schnabel, Claus
  3. Functional Forms in Discrete/Continuous Choice Models with General Corner Solution. By Felipe Vásquez; Michael Hanemann
  4. Quality Effects and the Value of Information on the Demand for Broadway Shows By Ricardo Cavazos; Felipe Vásquez; Jeffrey T. LaFrance

  1. By: Katsuhiro Yamaguchi
    Abstract: With the advent of Shinkansen in 1964, a unique inter-city transport network in which high-speed railway and air transport developed simultaneously, emerged in Japan, and modal choice between them based on price and speed has been manifested. Looking ahead, the next generation high-speed transport, the Maglev, is on the horizon. In order to capture the full impacts of the Maglev technology, simulation analysis with a dynamic spatial nested logit model was conducted. From this, we identified a significant opportunity for the Maglev Super-express between Tokyo, Nagoya and Osaka, but with net benefitsexceeding net costs only with an annual economic growth of approximately 2% - 3% achieved in the next 65 years in Japan. If such economic condition were realized, the total air transport market would also continue to grow despite strong competition from the Shinkansen/Maglev system. Another point of interest is Maglev’s impact on reducing global warming. CO2 emission from Maglev is one-third of air transport. Introduction of Maglev Super-express in inter-city transport, however, also attracts passengers from Shinkansen that has five times lower CO2 emission intensity. Indeed, our simulation analysis shows that total CO2 emissions from high-speed inter-city transport increases when Maglev Super-express is introduced. Increase in total CO2 emission from electricity users including Maglev Super-express could be mitigated by energy conversion sector’s effort to reduce CO2 content of electric power supply, for instance, by increasing utilization of nuclear energy. Further research in assessing possible impact of capacity constraint in existing network, not considered in this paper, would facilitate deeper understanding of the future high-speed inter-city transport system.
    Date: 2009–12
  2. By: Mosthaf, Alexander; Schank, Thorsten; Schnabel, Claus
    Abstract: This study analyzes state dependence in low-wage employment of western German women using GSOEP data, 2000-2006. We estimate dynamic multinomial logit models with random effects and find that having a low-wage job increases the probability of being low-paid and decreases the chances of being high-paid in the future, in particular for low-paid women working part-time. However, concerning future wage prospects low-paid women are clearly better off than unemployed or inactive women. We argue that for women low-wage jobs can serve as stepping stones out of unemployment and are to be preferred to staying unemployed and waiting for a better job. ; Mit Daten des Sozio-ökonomischen Panels für 2000-2006 untersucht diese Studie die Wahrscheinlichkeit westdeutscher Frauen, in Niedriglohnbeschäftigungen zu verbleiben (state dependence). Wir schätzen dynamische multinomiale Logit-Modelle mit zufälligen Effekten und finden, dass ein Niedriglohnjob die Wahrscheinlichkeit einer Niedriglohntätigkeit in der Zukunft erhöht und die Chancen auf einen Hochlohnjob verringert. Dies gilt insbesondere für geringverdienende Frauen, die Teilzeit arbeiten. Allerdings sind die Aussichten bezüglich künftiger Löhne für Frauen in Niedriglohntätigkeiten deutlich besser als für solche, die arbeitslos oder inaktiv sind. Wir folgern daraus, dass für Frauen Niedriglohnjobs als Sprungbrett aus der Arbeitslosigkeit dienen können und dass sie eine bessere Alternative darstellen als arbeitslos zu bleiben und auf bessere Arbeitsplatzangebote zu warten. --
    Keywords: low-pay dynamics,state dependence,dynamic multinomial logit model
    JEL: J30 J60 C33
    Date: 2009
  3. By: Felipe Vásquez (Departamento de Economía, Universidad de Concepción.); Michael Hanemann (Department of Agricultural and Resource Economics,University of California, Berkeley)
    Abstract: In this paper we present a new utility model that serves as the basis for modeling discrete/continuous consumer choices with a general corner solution.The new model involves a more flexible representation of preferences than what has been used in the previous literature and, unlike most of this literature, it is not additively separable. This functional form can handle richer substitution patterns such as complementarity as well as substitution among goods. We focus in part on the Quadratic Box-Cox utility function and examine its properties from both theoretical and empirical perspectives. We identify the significance of the various parameters of the utility function, and demonstrate an estimation strategy that can be applied to demand systems involving both a small and large number of commodities.
    Date: 2009
  4. By: Ricardo Cavazos (Institute of Business and Economic Research. Haas School of Business,University of California at Berkeley); Felipe Vásquez (Departamento de Economía, Universidad de Concepción.); Jeffrey T. LaFrance (School of Economic Sciences,Washington State University)
    Abstract: In this paper we estimate a demand curve for Broadway shows and estimate average willingness to pay for information on the quality of the show. The data employed are weekly time series observations on attendance to Broadway performances and individual characteristics of each Broadway show playing between December 1995 and June 2003. Our primary measure of quality is the number of Tony Awards won by each production. We use a discrete choice model which allows us to separate the e¤ect of prices and quality on the shows. attendance and we account for the endogeneity of prices and explicitly model the endogeneity of the outcome of the Tony award. Our results show Broadway theatre demand slopes down and the Tony Awards variable has a positive e¤ect on the shows. shares of occupied space, which turns into a positive willingness to pay for this quality indicator. Our results are robust to the inclusion of several types of .xed e¤ects including show, theatre, yearly, and monthly; di¤erent ways to model the endogeneity of price and the Tony award.
    Keywords: Cultural Economics, Quality perception, Demand models
    Date: 2009

This nep-dcm issue is ©2010 by Philip Yu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.