nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒07‒25
four papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Choice of Enterprise Form: Spain, 1886-1936 By Timothy Guinnane; Susana
  2. Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana By Berry, James; Fischer, Greg; Guiteras, Raymond
  3. A Misspecification Test for Finite-Mixture Logistic Models for Clustered Binary and Ordered Responses By Francesco BARTOLUCCI; Silvia BACCI; Claudia PIGINI
  4. Public support for hosting the Olympic Summer Games in Germany: The CVM approach By Pamela Wicker; John C. Whitehead; Daniel S. Mason; Bruce K. Johnson

  1. By: Timothy Guinnane (Economic Growth Center, Yale University); Susana (University of Murcia, Spain)
    Abstract: Economists have long neglected study of an important contractual decision, a firm’s choice of legal form. Enterprise form shapes the relations among a firm’s owners as well as many features of a firm’s interactions with the rest of the economy. Using unusual firm-level data on Spain 1886-1936, we estimate nested logit models of the determinants of enterprise form choice. In 1919, Spain introduced a new enterprise form that compromised between partnerships and corporations, and displaced larger partnerships and smaller corporations. This Sociedad de Responsabilidad Limitada was especially important for small and median-sized enterprises whose owners were not related.
    Keywords: Law and finance, law and economics, legal form of enterprise, Spanish economic history, limited partnership, limited-liability company
    JEL: K20 N43 N44
    Date: 2015–07
  2. By: Berry, James; Fischer, Greg; Guiteras, Raymond
    Abstract: We demonstrate the benefits and feasibility of using the Becker-DeGroot-Marschak (BDM) mechanism to elicit precise, individual-level willingness to pay and thereby enhance the information generated by randomized experiments. With a relatively small sample and minor modifications to a standard field experiment design, we can directly estimate demand, study the effect of prices on usage through screening and psychological (sunk-cost) effects, and compute heterogeneous marginal treatment effects. Applying the mechanism to a field experiment studying clean drinking water technology in northern Ghana, we show that even in an environment with low literacy and numeracy, BDM produces sensible results. We find that although willingness to pay for clean water technology is low relative to the cost, demand is surprisingly inelastic at low prices; prices do not generate significant sunk-cost effects; and treatment effects are heterogeneous with respect to valuation and consistent with outcomes being affected by effort expenditure.
    Keywords: field experiments; health behavior; heterogeneous treatment effects; price mechanism
    JEL: C26 C93 D12 L11 L31 O12 Q51
    Date: 2015–07
  3. By: Francesco BARTOLUCCI (Universit… di Perugia, Dipartimento di Economia); Silvia BACCI (Universit… di Perugia, Dipartimento di Economia); Claudia PIGINI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: An alternative to using normally distributed random effects in modeling clustered binary and ordered responses is based on using a nite-mixture. This approach gives rise to a exible class of generalized linear mixed models for item responses, multilevel data, and longitudinal data. A test of misspecication for these finite-mixture models is proposed which is based on the comparison between the Marginal and the Conditional Maximum Likelihood estimates of the fixed effects as in the Hausman's test. The asymptotic distribution of the test statistic is derived; it is of chi-squared type with a number of degrees of freedom equal to the number of covariates that vary within the cluster. It turns out that the test is simple to perform and may also be used to select the number of components of the finite-mixture, when this number is unknown. The approach is illustrated by a series of simulations and three empirical examples covering the main fields of application.
    Keywords: Generalized Linear Mixed Models, Hausman Test, Item Response Theory, Latent Class model, Longitudinal data, Multilevel data
    JEL: C12 C23 C52
    Date: 2015–07
  4. By: Pamela Wicker; John C. Whitehead; Daniel S. Mason; Bruce K. Johnson
    Abstract: Cities throughout the world continue to weigh the merits of hosting major sport events, including the Olympic Games. These events are considered desirable due to a range of benefits, including economic and/or tourism development. In addition, previous research has shown that hosting the Olympics may confer intangible benefits for cities and their residents. This paper presents the results of a contingent valuation method estimate of the monetary value of intangible benefits to Germans of hosting the Olympic Summer Games. In a nationwide online survey 6,977 respondents were asked if they would support a referendum to host the Games. The survey employed a payment card format containing monthly tax amounts to elicit willingness-to-pay to finance the Games over a five-year-period. In the weighted sample, 72 percent expressed a positive willingness-to-pay. Among those with a positive willingness-to-pay, average willingness-to-pay was €47. The results from grouped data hurdle models showed that various intangible benefits (e.g. pride and happiness in sporting success; increased German prestige) and policy consequentiality had a significant positive effect on willingness-to-pay. The findings have implications for policy makers since they show what population groups are more supportive of hosting the Games. Key Words: Contingent Valuation Method; Willingness-to-pay; Olympic Games; Public goods; Sport event
    Date: 2015

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