nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2014‒07‒05
two papers chosen by
Edoardo Marcucci
Universita' di Roma Tre

  1. Who is Overeducated and Why?: Probit and Dynamic Mixed Multinomial Logit Analyses of Vertical Mismatch in East and West Germany By Christina Boll; Julian Sebastian Leppin; Klaus Schömann
  2. Public Goods Provision in the Presence of Heterogeneous Green Preferences By Mark Jacobsen; Jacob LaRiviere; Michael Price

  1. By: Christina Boll; Julian Sebastian Leppin; Klaus Schömann
    Abstract: Overeducation is an often overlooked facet of untapped human resources. But who is overeducated and why? Relying on SOEP data 1984-2011, we use probit models for estimating the likelihood of entering overeducation and dynamic mixed multinomial logit models with random effects addressing state dependence and unobserved heterogeneity. As further robustness checks we use three specifications of the target variable, i.e. realized matches, self-assessment and twofold overeducation. We run separate analyses for men and women, East and West Germans and medium and highly educated persons. We find that overeducation is mainly state dependent. Nonetheless, even in the dynamic context staying employed proves to be risk-decreasing. By contrast, scars of past unemployment show up in a higher mismatch risk. Moreover, an employer change does not serve as a suitable exit strategy, and a dual qualification does not show up as a valid insurance against graduates' job mismatch. Overall, effects largely depend on the operationalization of overeducation. We conclude that to combat overeducation, focusing on continuous employment careers and circumventing unintentional withdrawals from the current job is crucial. Moreover, institutional impediments that restrain job match quality for certain groups (migrants, mothers) have to be tackled.
    Keywords: Overeducation, dynamic mixed multinomial logit, probit model, mismatch, Germany, state dependence
    JEL: J24 C25 C33 J71
    Date: 2014
  2. By: Mark Jacobsen; Jacob LaRiviere; Michael Price
    Abstract: We develop a model of the private provision of public goods in a world where agents face convex costs of provision. Consonant with prior empirical evidence, we introduce preference heterogeneity by allowing a subset of agents to exhibit pro-social behavior that reflects "green" preferences. We use the model to compare different policies to promote private provision of public goods such as environmental quality or energy conservation. Counter to the standard result, we find that technology standards are frequently preferred to price-based instruments. Extending the model to allow for both benefit and cost heterogeneity, we find that policy choice depends on the correlation between the two forms of heterogeneity.
    JEL: D03 D04 H41 Q48
    Date: 2014–06

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