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on Discrete Choice Models |
| By: | BERGER Frédéric; ISLAM Nizamul; LIEGEOIS Philippe |
| Abstract: | In this study, the household labour supply is modelled as a discrete choice problem assuming that preference for leisure and consumption can be described by a quadratic utility function which allows for non-convexities in the budget set. We assess behavioural responses to the significant changes in the tax-benefit system during 2001-2002 in Luxembourg. Only moderate impact is found, on average, on the efficiency of the economy as measured by the labour supply effects. The impact is indeed concentrated on richer single women. These increase significantly their labour force, which more than doubles the non-behavioural effect of the tax reform on disposable income and boosts the gains in well-being for that part of population. |
| Keywords: | Labour supply; Discrete choice; Households; Microsimulation; Tax reform |
| JEL: | C25 H24 H31 J22 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2010-10&r=dcm |
| By: | Anna Alberini (University of Maryland and FEEM); Milan Šcasný, Charles University Prague (Charles University Prague) |
| Abstract: | We report on the results of a survey based on conjoint choice experiments that was specifically designed to investigate the effect of context on the Value of a Statistical Life (VSL), an important input into the calculation of the mortality benefits of environmental policies that reduce premature mortality. We define “context” broadly to include i) the cause of death (respiratory illness, cancer, road traffic accident), ii) the beneficiary of the risk reduction (adult v. child), and iii) the mode of provision of the risk reduction (public program v. private good). The survey was conducted following similar protocols in Italy and the Czech Republic. When do not distinguish for the cause of death, child and adult VSL are not significantly different from one another in Italy, and the difference is weak in the Czech sample. When we distinguish for the cause of death, we find that child and adult VSLs are different at the 1% level for respiratory illnesses and road-traffic accidents, but do not differ for cancer risks. We find evidence of a “cancer premium” and a “public program premium.” In both countries, the marginal utility of income is about 20% lower among wealthier people, which makes the VSL about 20% higher among respondents with incomes above the sample average. The discount rate implicit in people‘s choices is effectively zero. We conclude that there is heterogeneity in the VSL, and that such heterogeneity is primarily driven by risk characteristics and mode of delivery of the risk reduction, rather than by individual characteristics of the respondent (e.g., income and education). For the most part, our results do not disagree with environmental policy analyses that use the same VSL for children and adults, and that apply a cancer premium. |
| Keywords: | VSL, Conjoint Choice Experiments, Mortality Risk Reductions, Cost-benefit Analysis, Forced Choice Questions |
| JEL: | I18 J17 K32 Q51 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.66&r=dcm |
| By: | Costas Meghir (Institute for Fiscal Studies and University College London); Steven Rivkin |
| Abstract: | <p>This paper reviews some of the econometric methods that have been used in the economics of education. The focus is on understanding how the assumptions made to justify and implement such methods relate to the underlying economic model and the interpretation of the results. We start by considering the estimation of the returns to education both within the context of a dynamic discrete choice model inspired byWillis and Rosen (1979) and in the context of the Mincer model. We discuss the relationship between the econometric assumptions and economic behaviour. We then discuss methods that have been used in the context of assessing the impact of education quality, the teacher contribution to pupils' achievement and the effect of school quality on housing prices. In the process we also provide a summary of some of the main results in this literature.</p> |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:10/10&r=dcm |