nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒01‒14
seven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. The use of heuristic optimization algorithms to facilitate maximum simulated likelihood estimation of random parameter logit models By Arne Risa Hole; Hong Il Yoo
  2. Does Hospital Reputation Influence the Choice of Hospital? By Adam Pilny; Roman Mennicken
  3. Putting One's Money Where One's Mouth is: Increasing Saliency in the Field. By Daniel A. Brent; Lata Gangadharan; Anke Leroux; Paul A. Raschky
  4. An Empirical Investigation of Peer effects on Fertility Preferences By Ankita Mishra; Jaai Parasnis
  5. Greening Household Behaviour and Food By Katrin Millock
  6. Households' Characteristics and the Modes of Remittances in Bangladesh By Mehdi Chowdhury
  7. Household Migration and Children's Educational Attainment. The case of Uganda By Lucia Ferrone; Gianna Claudia Giannelli

  1. By: Arne Risa Hole (University of Sheffield); Hong Il Yoo (Durham University Business School, Durham University)
    Abstract: The maximum simulated likelihood estimation of random parameter logit models is now commonplace in various areas of economics. Since these models have non-concave simulated likelihood functions with potentially many optima, the selection of "good" starting values is crucial for avoiding a false solution at an inferior optimum. But little guidance exists on how to obtain "good" starting values. We advance an estimation strategy which makes joint use of heuristic global search routines and conventional gradient-based algorithms. The central idea is to use heuristic routines to locate a starting point which is likely to be close to the global maximum, and then to use gradient-based algorithms to refine this point further to a local maximum which stands a good chance of being the global maximum. In the context of a random parameter logit model featuring both scale and coefficient heterogeneity (GMNL), we apply this strategy as well as the conventional strategy of starting from estimated special cases of the final model. The results from several empirical datasets suggest that the heuristically assisted strategy is often capable of finding a solution which is better than the best that we have found using the conventional strategy. The results also suggest, however, that the configuration of the heuristic routines that leads to the best solution is likely to vary somewhat from application to application.
    Keywords: mixed logit, generalized multinomial logit, differential evolution, particle swarm optimization
    JEL: C25 C61
    Date: 2014–12
  2. By: Adam Pilny; Roman Mennicken
    Abstract: A number of recent empirical studies document significant effects of in-patient care quality indicators on the choice of hospital. These studies use either objective quality indicators based on quantitative figures, or if subjective reputation scores are used, scores based on the opinion of hospital market insiders. We contribute to the current debate by using a subjective reputation score resorting to patient perceptions and examine its impact on the choice of hospital of patients undergoing a coronary artery bypass graft (CABG) in Germany. Our results show that 76% of the patients value hospital reputation positively when choosing a hospital. Moreover, we find evidence for a trade-off between hospital reputation and travel time, i.e. a significant share of patients is willing to accept additional travel time to get a treatment in a hospital with better reputation. The average marginal effect for hospital reputation confirms this finding, since the magnitude of the effect strengthens for higher thresholds of travel time. The results are robust for different degrees of co-morbidities and admission status.
    Keywords: Hospital choice; hospital reputation; mixed logit model
    JEL: C25 D12 I11
    Date: 2014–11
  3. By: Daniel A. Brent; Lata Gangadharan; Anke Leroux; Paul A. Raschky
    Abstract: We present a novel approach to address differences between stated and paid choices by incentivizing stated choices in a randomized field experiment. The treatment increases consequentiality in the field by making each decision financially relevant. Our results show that the treatment effect is small in aggregate. However, we find that the treatment increases estimates of the marginal utility of income, especially among low-income households. The treatment also affects estimates of preferences for specific attributes by reducing willingness to pay for attributes with indirect benefits. Respondents with greater self-reported environmental preferences are more susceptible to the treatment in attribute space.
    Keywords: Field experiment, non-market goods, stated preference, hypothetical bias
    JEL: Q51 C93
    Date: 2014–09
  4. By: Ankita Mishra; Jaai Parasnis
    Abstract: Individual fertility preference is influenced by observed social norms. The present paper estimates the effect of the observed fertility of peers on a woman’s fertility preference. We find that both neighbourhood peers and religious peers have a significant impact on individual fertility preferences, but their relative importance changes with family size. An increase in peer fertility increases the probability of preferring more children. While women’s fertility preferences conform to the changes in observed fertility of their peers, education plays an important role in moderating peer effects. Our results contribute to the understanding of peer effects in fertility as well as possible policy responses.
    Keywords: peer effects, multinomial logit, fertility, India, education, wealth status
    JEL: D12 J13
    Date: 2014–09
  5. By: Katrin Millock
    Abstract: This report focuses on households’ behaviour in relation to food consumption. It presents the results of follow-up econometric analysis of the 2011 OECD Survey on Environmental Policy and Individual Behaviour Change (EPIC). This report complements the overview of the survey data provided in the publication OECD (2014). It studies expenditure and willingness-to-pay (WTP) for organic food and food labelled as taking animal welfare into account...<BR>Ce rapport est consacré au comportement des ménages en matière d’alimentation. Il présente les résultats de travaux d’analyse économétrique qui s’inscrivent dans le prolongement de l’enquête sur la politique de l’environnement et le comportement individuel (EPIC) réalisée par l’OCDE en 2011. Ce rapport complète la synthèse des données de l’enquête présentée dans l’ouvrage OCDE (2014). Il est centré sur l’étude des dépenses réalisées et du consentement à payer (CAP) pour acquérir des aliments biologiques ou étiquetés comme respectant le bien-être des animaux.
    Keywords: labelling, household survey, attitudes, organic fruits and vegetables, animal welfare, behaviour, willingness-to-pay, fruits et légumes biologiques, attitudes, consentement à payer (CAP), bien-être animal, comportement, enquête auprès des ménages, étiquetage
    JEL: C51 D11 D12 Q18 Q58
    Date: 2014–12–10
  6. By: Mehdi Chowdhury
    Abstract: The modes of remittances of households in Bangladesh have been categorised as `No Remit- tances', `Internal Remittances' and `International Remittances'. This paper using a Multinomial Logit Model studies the associations between these modes and the households' basic character- istics. The study reveals that household level variables like rural-urban locations, age and sex of the households heads, religion, ratio of male, adult and young members etc. are potentially significant in households' orientation to remittances. Higher education however is not significant. The study surprisingly shows that the households with female heads are more likely to receive both internal and international remittances compared to the households headed by males. JEL No.: D01, F24, O53
  7. By: Lucia Ferrone (Dipartimento di Scienze per l'Economia e l'Impresa); Gianna Claudia Giannelli (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: In many Sub-Saharan African countries, a large number of people migrate internally or abroad because of demographic, economic and political factors. This pronounced mobility is likely to have consequences for children's education, still a matter of concern in the region. We study this issue for Uganda, investigating whether migration of household members affects children's primary education and in what direction. Using the Uganda National Panel Survey for 2005, 2009, 2010 and 2011, we estimate conditional fixed effects logit models of school attendance and primary school completion. We find that children's migration has a significant positive impact while adults' migration has a significant negative one on children's school attendance rates, while remittances have no influence. These findings suggest that children's migration is indeed beneficial, since it may contribute to match demand and supply of schooling. Adults' absence, instead, has controversial effects when children are left behind. In fact, lack of supervision and substitution of adults' tasks with child work might reduce the rate of school attendance. However, neither children's nor adults' migration seem to increase the rate of primary school completion, an evidence that points to the problem of the low quality of primary education in developing countries.
    Keywords: Migration, Schooling, Panel Data Models with Fixed Effects, Uganda
    JEL: I25 J13 J61 O15
    Date: 2014

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