nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2010‒12‒23
seven papers chosen by
Philip Yu
Hong Kong University

  1. Do Environmental Benefits Matter? A Choice Experiment Among House Owners in Germany By Achtnicht, Martin
  2. Endogenous Womenfs Autonomy and the Use of Reproductive Health Services: Empirical Evidence from Tajikistan By Yusuke Kamiya
  3. Empirical welfare analysis in random utility models of labour supply By André DECOSTER; Peter HAAN
  4. Bounds on willingness-to-pay in a pure-characteristics model of the demand for automobile variants By Øyvind THOMASSEN
  5. Macroeconomic Regimes, Policies, and Outcomes in the World By Klaus Schmidt-Hebbel
  6. A generalised nested-logit model of the demand for automobile variants By Øyvind THOMASSEN
  7. Automobile engine variants and price discrimination By Øyvind THOMASSEN

  1. By: Achtnicht, Martin (Centre for European Economic Research (ZEW))
    Abstract: Residential buildings strongly contribute to global CO2 emissions due to the high energy demand for electricity and heating, particularly in industrialised countries. Within the EU, decentralised heat generation is of particular relevance for future climate policy, as its emissions are not covered by the EU ETS. We conducted a choice experiment concerning energy retrofits for existing houses in Germany. In the experiment, the approximately 400 sampled house owners could either choose a modern heating system or an improved thermal insulation for their home. We used standard and mixed logit specifications to analyse the choice data. We found environmental benefits to have a significant impact on choices of heating systems. However, they played no role in terms of insulation choices. Based on the estimated mixed logit model, we further obtained WTP measures for CO2 savings.
    Keywords: Choice experiment; CO2 emissions; Energy efficiency; Energy saving; Mixed logit; Residential buildings; Willingness to pay.
    JEL: C25 D12 Q40 Q51
    Date: 2010–12
  2. By: Yusuke Kamiya (Ph.D candidate, Osaka School of International Public Policy (OSIPP))
    Abstract: Though gender equity is widely considered to be a key to improving maternal health in developing countries, little empirical evidence has been presented to support this claim. This paper investigates whether or not and how female autonomy within the household affects womenfs use of reproductive health care in Tajikistan, where the situation of maternal health and gender equity is worse compared with neighbouring countries. Estimation is performed using bivariate probit models in which womanfs use of health services and the level of female autonomy are recursively and simultaneously determined. Empirical results reveal that female autonomy measured by womenfs decision-making on child wellbeing and on economic affairs within the household increases the probability of receiving both antenatal and delivery care. Policymakers need to address womenfs empowerment in the household in addition to implementing direct health interventions towards improvement of maternal health.
    Keywords: Female autonomy; Antenatal care; Delivery care; Reproductive health services; Tajikistan; Bivariate probit model
    JEL: J12 J13 J16
    Date: 2010–12
  3. By: André DECOSTER; Peter HAAN
    Abstract: The aim of this paper is to apply recently proposed individual welfare measures in the context of random utility models of labour supply. Contrary to the standard practice of using reference preferences and wages, these measures preserve preference heterogeneity in the normative step of the analysis. They also make the ethical priors, implicit in any interpersonal comparison, more explicit. On the basis of microdata from the Socio Economic Panel (SOEP) for married couples in Germany, we provide empirical evidence about the sensitivity of the welfare orderings to different normative principles embodied in these measures. We retrieve individual and household specific preference heterogeneity, by estimating a structural discrete choice labor supply model. We use this preference information to construct welfare orderings of households according to the different metrics, each embodying different ethical choices concerning the preference heterogeneity in the consumption-leisure space. We then discuss how sensitive the assessment of a hypothetical tax reform is to the choice of metric. The chosen tax reform is similar to a subsidy of social security contributions.
    Date: 2010–11
  4. By: Øyvind THOMASSEN
    Abstract: I estimate a pure-characteristics discrete choice model of the demand for automobile engine and body style variants, using market-level data. Revealed preference bounds and imposed bounds on the willingness to pay for characteristics as a percentage of product price are sufficient to identify nonparametric taste distributions. Substitution patterns as determined by closest substitutes appear very realistic. The model can be estimated on a single cross-section of data.
    Date: 2010–04
  5. By: Klaus Schmidt-Hebbel
    Abstract: This paper summarizes a research project focused on the empirical determinants of and interrelations between macroeconomic regimes, policies, and performance in the world. The project’s hypotheses are structured into three related themes. The first aim is analyzing the determinants of the likelihood of adoption of macroeconomic policy regimes. The second project theme focuses on cyclicality of macroeconomic policies and accuracy in attaining inflation targets. Finally, the project tests for the behavior of two key macroeconomic variables - economic growth and inflation – focusing on their sensitivity to different macroeconomic regimes and policies. A large world database was assembled for this project from both publicly available and private databases. Data coverage extends to more than 100 countries, with annual time series extending from 1970 to 2008. A wide spectrum of frontier estimation techniques is applied to the country panel data series, appropriate for discrete-choice and continuous variable estimation. The key research results are the following. Country choice of macroeconomic policy regimes (exchange-rate regimes, money-based targeting, inflation targeting, and rule-based fiscal regimes) is explained by countries’ structural and institutional features, macroeconomic performance, financial development, and international integration. The cyclical behavior of fiscal policy reflects the quality of country institutions, financial openness, and financial development. Central bank accuracy in meeting inflation targets is also a result of domestic institutional strength and macroeconomic credibility. Long-term growth is significantly shaped by the quality of policies, financial development, foreign aid, and exchange-rate misalignment, in addition to standard growth determinants. Growth volatility is a result of domestic macroeconomic policy volatility, external shocks, international integration, and financial development. Country inflation rates are determined by international factors and domestic determinants, including fiscal policy, institutional development, monetary and exchangerate regimes, and financial depth and integration.
    Keywords: Macroeconomic Regimes, Macroeconomic Policies, Inflation, Growth.
    JEL: E58 E62 O47
    Date: 2010
  6. By: Øyvind THOMASSEN
    Abstract: This paper estimates the demand for car model variants instead of looking only at demand for models in terms of the ’baseline’ variant of each model as done in the literature. The data has sex and age of the buyer for every car sold in Norway 2000-2004, in addition to characteristics of the cars. The demand model uses this information to estimate taste coefficients which depend on demographic characteristics. A nested logit model and a generalised nested logit model are used to induce correlation in the logit error between products with observable and unobservable similarities. Results indicate that it may be problematic to have different logit errors for every product when the number of products is very high, even when allowing for flexible correlation patterns.
    Date: 2010–04
  7. By: Øyvind THOMASSEN
    Abstract: Using a structural model of demand for automobile engine variants, this paper finds that there is second-degree price discrimination: markups increase with engine size. Still, average markups are lower than when models have just one engine. The paper develops the first empirical demand framework suitable for markets with variants. There is an unobserved product characteristic and a consumer-specific logit term for classes of products, but both are fixed across variants. Fixed effects control for unobservables. The literature’s assumption of orthogonality between unobserved and observed product characteristics is not needed.
    Keywords: second-degree price discrimination, automobiles, discrete-choice demand models
    JEL: L11 L62 C25
    Date: 2010–04

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