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on Discrete Choice Models |
| By: | Velden R.K.W. van der; Humburg M. (GSBE) |
| Abstract: | In this study we elicit employers preferences for a variety of CV attributes and types of skills when recruiting university graduates. Using two discrete choice experiments, we simulate the two common steps of the graduate recruitment process 1 the selection of suitable candidates for job interviews based on CVs, and 2 the hiring of graduates based on observed skills. We show that in the first step, employers attach most value to CV attributes which signal a high stock of occupation-specific human capital indicating low training costs and short adjustment periods; attributes such as relevant work experience and a good match between the field of study and the job tasks. In line with the preferences in the first step, employers actual hiring decision is mostly influenced by graduates level of professional expertise and interpersonal skills. Other types of skills also play a role in the hiring decision but are less important, and can therefore not easily compensate for a lack of occupation-specific human capital and interpersonal skills. |
| Keywords: | Analysis of Education; Human Capital; Skills; Occupational Choice; Labor Productivity; |
| JEL: | J24 I21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2014003&r=dcm |
| By: | Hyeongwoo Kim |
| Abstract: | We investigate the Bank of Korea's interest rate setting behavior using a discrete choice model, where the Monetary Policy Committee revises the target policy interest rate only when the gap between the current market interest rate and the optimal rate exceeds a certain threshold value. Using monthly frequency data since 2000, we evaluate an array of ordered probit models in terms of the in-sample fit. We find important roles for the output gap, inflation, and the won depreciation rate against the US dollar. We also implement out-of-sample forecast exercises with September 2008 (Lehman Brothers Bankruptcy) for a split point, finding good out-of-sample predictability of our models. |
| Keywords: | Monetary Policy; Bank of Korea; Ordered Probit Model; Target RP Rate; Interbank Call Rate; Taylor Rule |
| JEL: | E52 E58 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2014-02&r=dcm |
| By: | Frank M. Fossen; Daniela Glocker |
| Abstract: | Stated survey measures of risk preferences are increasingly being used in the literature, and they have been compared to revealed risk aversion primarily by means of experiments such as lottery choice tasks. In this paper, we investigate educational choice, which involves the comparison of risky future income paths and therefore depends on risk and time preferences. In contrast to experimental settings, educational choice is one of the most important economic decisions taken by individuals, and we observe actual choices in representative panel data. We estimate a structural microeconometric model to jointly reveal risk and time preferences based on educational choices, allowing for unobserved heterogeneity in the Arrow-Pratt risk aversion parameter. The probabilities of membership in the latent classes of persons with higher or lower risk aversion are modelled as functions of stated risk preferences elicited in the survey using standard questions. Two types are identified: A small group with high risk aversion and a large group with low risk aversion. The results indicate that persons who state that they are generally less willing to take risks in the survey tend to belong to the latent class with higher revealed risk aversion, which indicates consistency of stated and revealed risk preferences. The relevance of the distinction between the two types for educational choice is demonstrated by their distinct reactions to a simulated tax policy scenario. |
| Keywords: | Educational choice, stated preferences, revealed preferences, risk aversion, time preference |
| JEL: | I20 D81 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1361&r=dcm |
| By: | Ferreira Filipe, Sara; Grammatikos, Theoharry; Michala, Dimitra |
| Abstract: | In the European Union, small and medium sized enterprises (SMEs) represent 99% of all businesses and contribute to more than half of the total value-added. In this paper, we develop distress prediction models for SMEs using a dataset from eight European countries over the period 2000-2009. We examine idiosyncratic and systematic covariates and find that the first discriminate between healthy and distressed firms based on their relative level of risk, whereas the second move the overall distress rates. Moreover, SMEs across Europe are vulnerable to the same idiosyncratic factors but systematic factors vary in different regions. Also, micro SMEs are more vulnerable to these systematic factors compared to larger SMEs. The paper contributes to the literature in several ways. First, using a sample with many micro companies, it offers unique insights into the European small business sector. Second, it is the first paper to explore distress in a multi-country setting, allowing for regional comparisons and uncovering regional vulnerabilities. Third, by incorporating systematic dependencies, the models can capture changes in overall distress rates and comovements during economic cycles. |
| Keywords: | credit risk, distress, forecasting, SMEs, discrete time hazard model, multi-period logit model, duration analysis |
| JEL: | C13 C41 C53 G33 |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53572&r=dcm |
| By: | Dai, Danielle; Weinzimmer, David |
| Abstract: | Employer-provided private shuttles have become a prominent part of the transportation network between San Francisco and Silicon Valley. As the Bay Area plans for transportation investments to meet sustainability goals and accommodate future population and employment growth, an understanding of the role of regional commuter shuttles becomes increasingly important. This study investigates the impacts of private shuttles on commute mode and residential location choice by conducting a travel time comparison and surveying shuttle riders. The authors find that the provision of shuttles and knowledge of shuttle stops influences both commute mode and residential location choice. Shuttles are an attractive option due to their time and cost savings compared to other modes. However, shuttles exacerbate the jobs-housing imbalance by enabling individuals to live farther from work. The extent to which location of shuttle stops influences residential location choice varies from person to person, though the vast majority of shuttle riders live within a short walk from the nearest shuttle stop. Policies should strike a balance between improved sustainability with existing land use patterns and better long-term regional transportation and land use planning. |
| Keywords: | Engineering, Social and Behavioral Sciences, Commuting, Land use planning, Mode choice, Residential location, San Francisco Bay Area, Shuttle buses, Silicon Valley |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt2jr7z01q&r=dcm |
| By: | Bertoli, Simone; Rapoport, Hillel |
| Abstract: | A growing number of OECD countries are leaning toward adopting quality-selective immigration policies. The underlying assumption behind such policies is that more skill-selection should raise immigrants’ average quality (or education level). This view tends to neglect two important dynamic effects: the role of migration networks, which could reduce immigrants’ quality, and the responsiveness of education decisions to the prospects of migration. Our model shows that migration networks and immigrants’ quality can be positively associated under a set of sufficient conditions regarding the degree of selectivity of immigration policies, the initial pattern of migrants’ self-selection on education, and the way time-equivalent migration costs by education level relate to networks. The results imply that the relationship between networks and immigrants’ quality should vary with the degree of selectivity of immigration policies at destination. Empirical evidence presented as background motivation for this paper suggests that this is indeed the case. |
| Keywords: | migration; self-selection; brain drain; immigration policy; discrete choice models |
| JEL: | F22 O15 J61 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1405&r=dcm |