nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒10‒25
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Composite likelihood inference for hidden Markov models for dynamic networks By Bartolucci, Francesco; Marino, Maria Francesca; Pandolfi, Silvia
  2. The empirical analysis of the determinants of migration and remittances in Kenya and the impact on household expenditure patterns By Jena, Farai
  3. Willingness to pay for quality attributes of fresh beef. Implications on the retail marketing By Berges, Miriam; Casellas, Karina; Rodríguez, Ricardo; Errea, Damián
  4. Indecisiveness, Undesirability and Overload Revealed Through Rational Choice Deferral By Gerasimou, Georgios
  5. Rationality, decision flexibility and pensions By Koç, Emre
  6. Gradual Retirement, Financial Incentives, and Labour Supply of Older Workers: Evidence from a Stated Preference Analysis By Elsayed, Ahmed; de Grip, Andries; Fouarge, Didier; Montizaan, Raymond

  1. By: Bartolucci, Francesco; Marino, Maria Francesca; Pandolfi, Silvia
    Abstract: We introduce a hidden Markov model for dynamic network data where directed relations among a set of units are observed at different time occasions. The model can also be used with minor adjustments to deal with undirected networks. In the directional case, dyads referred to each pair of units are explicitly modelled conditional on the latent states of both units. Given the complexity of the model, we propose a composite likelihood method for making inference on its parameters. This method is studied in detail for the directional case by a simulation study in which different scenarios are considered. The proposed approach is illustrated by an example based on the well-known Enron dataset about email exchange.
    Keywords: Dyads; EM algorithm; Enron dataset; Latent Markov models
    JEL: C13 C14 C18 C3
    Date: 2015–10–14
  2. By: Jena, Farai
    Abstract: This thesis conducts empirical analysis on the determinants of migration and remittance sending decisions in Kenya and the impact on the expenditure patterns of households using cross-sectional household survey data. The first empirical chapter explores the factors that influence the subsequent migration decisions of Kenyan siblings using binary logit models. The findings reveal that preceding sibling migrants have a strong negative effect on the probability of migration for other siblings. Evidence in support of migration as a joint household level decision is obtained as preceding sibling and non-sibling migrants are found to exhibit similar effects. Conditional on migrating, siblings are shown to utilize existing sibling networks by moving to the same internal or external destination as preceding migrants. Discrete failure time models are also employed so as to account for any neglected heterogeneity at the household level. Controlling for neglected heterogeneity, the overall effect of preceding sibling migrants is found to be statistically insignificant. However, non-sibling migrants are found to decrease the probability of migrating. The second empirical chapter examines the remittance behaviour of multiple compared to sole sibling migrants, and the motivations of Kenyan siblings in sending remittances to their household of origin. No evidence of selection bias in the decision to remit is detected when a Heckman selection model is estimated. Using probit and OLS models, the presence of other siblings is found to decrease the probability of remitting but to have no effect on the amount of remittances sent. The amount of remittances sent by other siblings is also found to have no statistically significant effect on the remittances sent by a sibling using IV regression methods. In the third empirical chapter, the expenditure patterns of Kenyan households are investigated according to whether the household is a migrant or non-migrant household, and whether a migrant household is in receipt of remittances or not using an Almost Ideal Demand System (AIDS) approach. The analysis reveals that remitters who are spouses and siblings of the household have higher bargaining power towards the allocation of remittances to physical investments and durable goods, respectively. The expenditure patterns also show that remittances are not pooled together with general income when allocating the household budget towards durable goods and physical investments. In addition, the findings reveal that the reported uses of remittances by Kenyan households contrast with their actual uses. In the fourth chapter, the uses of remittances for the acquisition of physical investments and durable goods are analysed in more detail using IV and bivariate probit models. Remittances are found to be exogenous for the durable goods category but endogenous for physical investments. The evidence obtained is supportive of remittances being used by households to purchase these categories of commodities
    Date: 2015–05
  3. By: Berges, Miriam; Casellas, Karina; Rodríguez, Ricardo; Errea, Damián
    Abstract: In recent decades, the demand for food worldwide has undergone significant changes that have highlighted the issue of the quality and safety food crisis associated with consumption of fresh meat, consumer concerns about the quality and safety of these products has been safety of fresh meat consumption are not The aim of this work is to investigate the consumers' perceptions of safety and identify factors that help explain the willingness to pay safety of the product, including, a hypothetical hygiene certification in handling and retailing. The results indicate a positive and statistically significant for the following attributes of fresh meat WTP: personalized attention in a butcher counter, the presence of a "safety certification" in the place of purchase and the bright red color on the product.
    Keywords: Preferencias del Consumidor; Disposición a Pagar; Carne; Atributos de Calidad;
    Date: 2015–08
  4. By: Gerasimou, Georgios
    Abstract: Three reasons why decision makers may defer choice are *indecisiveness* between feasible options, *unattractiveness* of these options and *choice overload*. This paper provides a choice-theoretic explanation for each of these phenomena by means of three deferral-permissive models of decision making that are driven by preference incompleteness, undesirability and complexity constraints, respectively. These models feature *rational* choice deferral in the sense that whenever the individual does choose an option from a menu, this is a most preferred option in that menu, so that choices are always WARP-consistent. The models also allow for the use of observable data to recover the individual's preferences and, where applicable, the indecisiveness and undesirability components of these preferences.
    Keywords: Choice deferral; incomplete preferences; indecisiveness; unattractiveness; choice overload; revealed preference.
    JEL: D01 D03 D11
    Date: 2015–10
  5. By: Koç, Emre (Tilburg University, School of Economics and Management)
    Abstract: In this thesis several different aspects of the standard economic theory (SET) are examined. One of the premises of the SET is that whether or not an agent has choice flexibility does not influence his behavior. In the first chapter of the thesis we design an experiment to test the validity of this claim. We find that subjects behave in a way that justifies their earlier choices and therefore, choice flexibility does affect behavior. <br/>The standard economic framework is commonly used to examine consumption behavior of individuals and households. According to the SET, consumption growth is unchanged when a worker loses his job or when an unemployed individual finds a job as long as the transition event is anticipated. In the second chapter of this thesis we test this particular prediction of the SET. We use self-reported expectations of individuals to measure how much they anticipate a given transition. We find that consumption behavior is compatible with the SET.<br/>Internal consistency of preferences is another important premise of the SET. In the third and fourth chapters, we are interested in the question of whether decision makers have inconsistent time preferences and if so whether they behave in a sophisticated manner. To investigate these issues we conduct a two-stage experiment, where choices made in the first stage could affect the choices that will be available to the subject in the second stage. We find that the majority of our subjects have inconsistent preferences and roughly half of them exhibit sophisticated behavior. In the fourth chapter we consider the roles of uncertainty and the decision makers’ preference for choice flexibility. We find that uncertainty plays an important role and our subjects tend to avoid making a choice in the second stage.<br/>
    Date: 2015
  6. By: Elsayed, Ahmed (IZA); de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Montizaan, Raymond (ROA, Maastricht University)
    Abstract: Using data from a stated preferences experiment in the Netherlands, we find that replacing full-time pension schemes with schemes that offer gradual retirement opportunities induce workers to retire one year later on average. Total life-time labour supply, however, decreases with 3.4 months because the positive effect of delayed retirement on labour supply is cancelled out by the reduction in working hours before full retirement. The impact of gradual retirement schemes is, however, heterogeneous across groups of workers. Workers with non-routine job tasks retire at a later age when they can gradually retire. Financial incentives, either in terms of changing pension income or the price of leisure, also affect the expected retirement age, but the impact of these financial incentives does not differ with the possibility of gradual retirement. Finally, we find that gradual retirement is not a preferred option among workers as the large majority still prefers full retirement. This especially holds for workers with a lower wage and those with higher life expectancy.
    Keywords: gradual retirement, labour supply, financial incentives
    JEL: J14 J26
    Date: 2015–10

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