nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2012‒04‒17
three papers chosen by
Philip Yu
Hong Kong University

  1. Choice Probability Generating Functions By Mogens Fosgerau; Daniel L. McFadden; Michel Bierlaire
  2. Modeling employment dynamics with state dependence and unobserved heterogeneity By Prowse, Victoria
  3. Equilibrium Tuition, Applications, Admissions and Enrollment in the College Market By Chao Fu

  1. By: Mogens Fosgerau; Daniel L. McFadden; Michel Bierlaire
    Abstract: This paper considers discrete choice, with choice probabilities coming from maximization of preferences from a random utility field perturbed by additive location shifters (ARUM). Any ARUM can be characterized by a choice-probability generating function (CPGF) whose gradient gives the choice probabilities, and every CPGF is consistent with an ARUM. We relate CPGF to multivariate extreme value distributions, and review and extend methods for constructing CPGF for applications.
    JEL: C25 D11
    Date: 2012–04
  2. By: Prowse, Victoria
    Abstract: We extend existing work on the dynamics of labor force participation by distinguishing between full-time and part-time employment and by allowing unobserved heterogeneity in the effects of previous employment outcomes, children and education on labor supply behavior. In addition, unobserved heterogeneity may feature autocorrelation and correlated random effects. Our results reveal significant variation in the effects of children and education on labor supply behavior. Moreover, the omission of random coefficients and autocorrelation biases estimates of state dependencies. On average, temporary shocks that increase the rate of part-time employment lead subsequently to lower rates of non-employment than do shocks that temporarily increase the rate of full-time work.
    Keywords: Discrete Labor Supply; Repeated Multinomial Choice; Maximum Simulated Likelihood Estimation
    JEL: C52 J22 C33
    Date: 2012–04–10
  3. By: Chao Fu (Department of Economics, University of Wisconsin, Madison)
    Abstract: I develop and estimate a structural equilibrium model of the college market. Students, having heterogeneous abilities and preferences, make college application decisions, subject to uncertainty and application costs. Colleges, observing only noisy measures of student ability, choose tuition and admissions policies to compete for more able students. Tuition, applications, admissions and enrollment are joint outcomes from a subgame perfect Nash equilibrium. I estimate the structural parameters of the model using data from the National Longitudinal Survey of Youth 1997, via a three-step procedure to deal with potential multiple equilibria. In counterfactual experiments, I use the model .rst to examine the extent to which college enrollment can be increased by expanding the supply of colleges, and then to assess the importance of various measures of student ability.
    Keywords: College market, tuition, applications, admissions, enrollment, discrete choice, market equilibrium, multiple equilibria, estimation
    JEL: J00 I20
    Date: 2012–01–03

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