nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2011‒09‒22
four papers chosen by
Philip Yu
Hong Kong University

  1. Non-Linear Mixed Logit By Steffen Andersen; Glenn W. Harrison; Morten Lau; Elisabet E. Rutstroem
  2. A Simplified Mixed Logit Demand Model with an Application to the Simulation of Entry By Sergio Aquino de Souza
  3. Models of Truncation, Sample Selection, and Limited Dependent Variables: Suggestions for a Common Language By Biørn, Erik; R. Wangen, Knut
  4. Estimating Travellers’ Preferences for Competition in Commercial Passenger Rail Transport By Johannes Paha; Dirk Rompf; Christiane Warnecke

  1. By: Steffen Andersen (Copenhagen Business School); Glenn W. Harrison (Robinson College of Business, Georgia State University); Morten Lau (Durham Business School); Elisabet E. Rutstroem (Robinson College of Business, Georgia State University)
    Abstract: We develop an extension of the familiar linear mixed logit model to allow for the direct estimation of parametric non-linear functions defined over structural parameters. Classic applications include the estimation of coefficients of utility functions to characterize risk attitudes and discounting functions to characterize impatience. There are several unexpected benefits of this extension, apart from the ability to directly estimate structural parameters of theoretical interest.
    Date: 2011–01–01
  2. By: Sergio Aquino de Souza
    Abstract: The key contribution of this paper is to show how to incorporate more information into the empirical strategy in order to avoid the need of valid instruments, which are difficult to find in many instances. I use information on price elasticity to propose a methodology that is able to determine the parameters of a simplified Mixed Logit Model. I also apply this methodology to the ready-to-eat cereal industry and simulate the competitive and welfare effects of the introduction of new products.
    Keywords: Discrete-Choice, Demand Models, Competition
    JEL: L11 D12
    Date: 2011
  3. By: Biørn, Erik (Dept. of Economics, University of Oslo); R. Wangen, Knut (Department of Health Management and Health Economics, University of Oslo)
    Abstract: The aim of this paper is two-fold: (a) to establish a ‘map’ for describing the wide class of Limited Dependent Variables (LDV) univariate and multivariate models in the econometric literature and (b) to localize typical models in this tradition within the structure, extending typologies of Heckman (1976) and Amemiya (1984). The classification system, or language, proposed, is given at different level of detail. Its scope is (1) that the latent variables can have any parametric distribution, (2) that a set of observation rules which include the observed, censored, missing status, is imposed, (3) that it should be possible to write a model combining (1) and (2) by means of a computer algorithm, also potentially applicable for generating samples and (4) that the models belonging to the system should have names to facilitate communication among researchers. The likelihood functions corresponding to the models’ observed endogenous variables are discussed, but the paper is not concerned with describing the application of these functions for inference.
    Keywords: Micro-econometrics; Limited dependent variables; Latent variables; Discrete choice; Censoring; Truncation; Missing observations
    JEL: C16 C24 C25 C34 C35 C51
    Date: 2011–09–14
  4. By: Johannes Paha (University of Giessen); Dirk Rompf (University of Giessen); Christiane Warnecke (University of Giessen)
    Abstract: The current level of competition in European commercial passenger rail markets is low and empirical data on customer preferences in intramodal competition has hardly been available, yet. Our study raises the knowledge of competition in commercial passenger rail by exploring the determinants of customers’ choice behaviour on two cross-border routes, Cologne-Brussels and Cologne-Amsterdam. We analyse stated preference information from about 700 on-train interviews by means of multinomial Logit regressions. Our analysis indicates that customers experiencing competition (Cologne-Brussels) show a higher preference for competitive services than customers for whom competition is a purely hypothetical situation (Cologne-Amsterdam). Moreover, travellers show a status quo bias, i.e. a preference for the service provider on whose trains they were interviewed which partly stems from switching costs. These findings regarding status quo bias and switching costs complement previous studies on the outcome of intramodal competition, implying that entry is even more difficult than they predicted.
    Keywords: Competition, Passenger, Rail, Transport, Discrete Choice, Multinomial Logit
    JEL: C25 D12 D40 L92
    Date: 2011

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