nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒09‒05
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Estimation of Dynastic Life-Cycle Discrete Choice Models By Gayle, George-Levi; Golan, Limor; Soytas, Mehmet A.
  2. How much do the common goods of rural and semi-natural landscape cost? A case study By Dranco, Daniel; Luiselli, Luca
  3. Valuing in-vehicle comfort and crowding reduction in public transport By Björklund, Gunilla; Swärdh, Jan-Erik
  4. Valuing Convenience in Public Transport: Roundtable Summary and Conclusions By Mark WARDMAN
  5. Directional Monotone Comparative Statics* By Anne-Christine Barthel; Tarun Sabarwal
  6. What is the source of the intergenerational correlation in earnings? By Gayle, George-Levi; Golan, Limor; Soytas, Mehmet A.

  1. By: Gayle, George-Levi (Federal Reserve Bank of St. Louis); Golan, Limor (Federal Reserve Bank of St. Louis); Soytas, Mehmet A. (Graduate School of Business, Ozyegin University)
    Abstract: This paper explores the estimation of a class of life-cycle discrete choice intergenerational models. It proposes a new semiparametric estimator. It shows that it is root-N-consistent and asymptotically normally distributed. We compare our estimator with a modified version of the full solution maximum likelihood estimator (MLE) in a Monte Carlo study. Our estimator performs comparably to the MLE in a finite sample but greatly reduces the computational cost. The paper documents that the quantity-quality trade-offs depend on the household composition and specialization in the household. Using the proposed estimator, we estimate a dynastic model that rationalizes these observed patterns.
    JEL: C13 J13 J22 J62
    Date: 2015–08–13
  2. By: Dranco, Daniel; Luiselli, Luca
    Abstract: A Contingent Valuation (CV) was used to estimate the common goods’ overall value of three landscapes (woodlands, wetlands, rural landscape) of the Province of Rome, to use them for policy and administration purpose. Both single and multi-bounded discrete choice models was used. The results are similar between models with a repeated maximum likelihood trend of decreasing mean values from rural landscape to wetlands. The statistical robustness of this trend can be explained by the different organization of multiple consequential and deontological motives that build up preferences. The value assigned by tax payers to common goods analysed sums to a large extent up to the province budget and mean direct use values per hectare are comparable (cropland) or much smaller (woodlands) than indirect and non use values. The indications obtained could be considered robust enough to address decisions and policies (like that of rural development) about how much to pay for common goods management services.
    Keywords: willingness to pay, Contingent Valuation, ecosystem services, public goods, Total Economic Value, multiple motivations distribution, pay for ecosystem services.
    JEL: Q57
    Date: 2014–03
  3. By: Björklund, Gunilla (VTI); Swärdh, Jan-Erik (VTI)
    Abstract: The purpose of the present study is to estimate the WTP for comfort, i.e. to get a seat, and crowding reduction on board local public transport in Sweden, including the modes metro, tram, commuter train, and local bus. We use data from a stated preference-study conducted in the three largest urban areas of Sweden. Respondents were recruited both during a trip and from a web panel. The stated preference-questions consisted of four attributes: travel cost, travel time, seating or standing during the trip, and crowding level. Crowding level was illustrated by pictures showing different number of standing travelers per square meter. The estimated results suggest a WTP for seating of SEK 30 to 37 (SEK 10 approximately equal EUR 1) per hour depending on the crowding level. A reduction to no standing passengers from 4 and 8 standing passengers per square meter is valued SEK 12-13 and 27-32 respectively, depending on seating or standing condition. A reduction to no standing passengers from 1 standing passenger per square meter is not worth anything when the traveler is seating but SEK 8 when the traveler is standing. If we instead interpret our estimated results as value of travel time saving-multipliers, the worst travel condition in our study, i.e. standing in a crowding of 8 standing passengers per square meter, has a multiplier of about 2.1. All in all, our results seem plausible as they lies in the middle of comparable estimated results from earlier studies that have valuated comfort and crowding reductions. Finally, sensitivity analysis also show that the results seem to be both robust and in line with value of travel time savings-knowledge.
    Keywords: Public transport; Comfort; Crowding; Willingness to pay; Value of travel time savings
    JEL: C25 R41
    Date: 2015–09–02
  4. By: Mark WARDMAN
    Abstract: The experience of transport systems users, in terms of comfort, reliability, safety and above all convenience, is critical in determining demand for transport services, at least when there is a choice of alternative ways to travel. Convenience is one of the strongest attractions of the private car for passenger transport. For users of public transport, convenience is also clearly important but not always clearly defined and not often measured in designing transport systems or monitoring their operating performance. In many situations, an increase in public transport convenience reduces the unit costs of travel (euros/dollars per hour or cents per minute) and so provides benefits equivalent to an increase in travel speed. This report focuses on convenience and its importance to the user experience. It reviews operational definitions of convenience, evidence for the willingness of users to pay for convenience and the use of indicators to assess and improve the convenience of public transport, with a view to making it more effective and more competitive.
    Date: 2014–05–13
  5. By: Anne-Christine Barthel (Department of Economics and Business, Randolph College); Tarun Sabarwal (Department of Economics, University of Kansas)
    Abstract: Many questions of interest in economics can be stated in terms of monotone comparative statics: if a parameter of a constrained optimization problem “increases,” when does its solution “increase” as well. This paper studies monotone comparative statics in different directions in finite-dimensional Euclidean space. The conditions on the objective function are ordinal and retain the same flavor as their counterparts in the standard theory. They can be naturally specialized to cardinal conditions, and to differential conditions using directional derivatives. Conditions on both the objective function and the constraint set do not require new binary relations or convex domains. The results allow flexibility to explore comparative statics with respect to the constraint set, with respect to parameters in the objective function, or both. Results from Quah (2007) are included as a special case. The usefulness of the results is highlighted with applications in consumer theory, producer theory, and game theory, including applications to consumer demand, theory of competition, labor-leisure decisions with discrete choices, environmental emissions standards, and auctions.
    Keywords: monotone comparative statics, directional single-crossing property, directional set order
    JEL: C60 C61 D10 D20 D40
    Date: 2015–08
  6. By: Gayle, George-Levi (Federal Reserve Bank of St. Louis); Golan, Limor (Federal Reserve Bank of St. Louis); Soytas, Mehmet A. (Graduate School of Business, Ozyegin University)
    Abstract: This paper uses a dynastic model of household behavior to estimate and decomposed the correlations in earnings across generations. The estimate model can explain 75% to 80% of the observed correlation in lifetime earnings between fathers and sons, mothers and daughters, and families across generations. The main results are that the family and division of labor within the household are the main source of the correlation across generation and not just assorting mating. The interaction of human capital accumulation in labor market, the nonlinear return to part-time versus full-time work, and the return parental time investment in children are the main driving force behind the intergenerational correlation in earnings and assortative mating just magnify these forces.
    Keywords: Intergenerational Models; Estimation; Discrete Choice; Human Capital; PSID
    JEL: C13 J13 J22 J62
    Date: 2015–08–24

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