nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2012‒05‒02
five papers chosen by
Philip Yu
Hong Kong University

  1. Lower-order logsums By André De Palma; Karim Kilani
  2. Inferred vs Stated Attribute Non-Attendance in Choice Experiments: A Study of Doctors' Prescription Behaviour By Arne Risa Hole; Julie Riise Kolstad; Dorte Gyrd-Hansen
  3. Offsetting versus Mitigation Activities to Reduce CO2 Emissions: A Theoretical and Empirical Analysis for the U.S. and Germany By Andreas Lange; Andreas Ziegler
  4. Existence and Magnitude of Health-related Externalities: Evidence from a Choice Experiment By Jeremiah Hurley; Emmanouil Mentzakis
  5. EDUCATION AND LABOUR MARKET OUTCOMES: EVIDENCE FROM INDIA By Geraint Johnes; A Aggarwal; R Freguglia; G Spricigo

  1. By: André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - École normale supérieure de Cachan - ENS Cachan); Karim Kilani (LIRSA, Conservatoire National des Arts et Métiers - Conservatoire National des Arts et Métiers (CNAM))
    Abstract: The logsum formula, which provides the expected maximum utility for the multinomial logit model, is often used as a measure of welfare. We provide here a closed form formula of the welfare measure of an individual who has not access to his first-best choice, but has access to his rth-best choice, r = 2, ...n, where n is the number of alternatives. The derivation is based on a standard identity in order statistics.
    Keywords: Discrete choice models; Gumbel distribution; Logit; Logsum; Order statistics
    Date: 2012–04–23
  2. By: Arne Risa Hole (Department of Economics, The University of Sheffield); Julie Riise Kolstad (UNI Rokkan Centre, University of Bergen); Dorte Gyrd-Hansen (Health Economics Research Unit, University of Southern Denmark)
    Abstract: It is increasingly recognised that respondents to choice experiments employ heuristics such as attribute non-attendance (ANA) to simplify the choice tasks. This paper develops an econometric model which incorporates preference heterogeneity among respondents with different attribute processing strategies and allows the ANA probabilities to depend on the respondents' stated non-attendance. We find evidence that stated ANA is a useful indicator of the prevalence of nonattendance in the data. Contrary to previous papers in the literature we find that willingness to pay estimates derived from models which account for ANA are similar to the standard logit estimates.
    Keywords: choice experiment; attribute non-attendance
    JEL: C25 I10
    Date: 2012
  3. By: Andreas Lange (University of Hamburg); Andreas Ziegler (University of Kassel)
    Abstract: This paper studies the voluntary provision of public goods that is partially driven by a desire to offset for individual polluting activities. We first extend existing theory and show that offsets allow a reduction in effective environmental pollution levels while not necessarily extending the consumption of a polluting good. We further show a nonmonotonic income-pollution relationship and derive comparative static results for the impact of an increasing environmental preference on purchases of offsets and mitigation activities. Several theoretical results are then econometrically tested using a novel data set on activities to reduce CO2 emissions for the case of vehicle purchases in the U.S. and Germany. We show that an increased environmental preference triggers the use of CO2 offsetting and mitigation channels in both countries. However, we find strong country differences for the purchase of CO2 offsets. While such activities are already triggered by a high general awareness of the climate change problem in the U.S., driver’s license holders in Germany need to additionally perceive road traffic as being responsible for CO2 emissions to a large extent.
    Keywords: public good, voluntary provision, climate change, CO2 offsetting, vehicle purchase, discrete choice models
    JEL: C25 C35 H41 Q54
    Date: 2012
  4. By: Jeremiah Hurley (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University, Department of Clinical Epidemiology and Biostatistics, McMaster University); Emmanouil Mentzakis (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University)
    Abstract: Health-related external benefits are of potentially large importance for public policy. This paper investigates health-related external benefits using a stated-preference discrete-choice experiment framed in a health care context and including choice scenarios defined by six attributes related to a recipient and the recipient's condition: communicability, severity, medical necessity, relationship to respondent, location, and contribution requested. Subjects also completed a set of own-treatment scenarios and a values-orientation instrument. We find evidence of substantial health-related external benefits that vary as expected with the scenario attributes and subjects' value orientations. The results are consistent with a number of hypotheses offered by the general theoretical analysis of health-related externalities and the analysis of externalities specific to health care
    Date: 2011
  5. By: Geraint Johnes; A Aggarwal; R Freguglia; G Spricigo
    Abstract: The impact of education on labour market outcomes is analysed using data from various rounds of the National Sample Survey of India. Occupational destination is examined using both multinomial logit analyses and structural dynamic discrete choice modelling. The latter approach involves the use of a novel approach to constructing a pseudo-panel from repeated cross-section data, and is particularly useful as a means of evaluating policy impacts over time. We find that policy to expand educational provision leads initially to an increased takeup of education, and in the longer term leads to an increased propensity for workers to enter non-manual employment.
    Date: 2011

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