nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2015‒11‒15
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. On the decomposition of Generalized Additive Independence models By Michel Grabisch; Christophe Labreuche
  2. Labor Market Policies and Self-Employment Transitions of Older Workers By Dimitris Christelis; Raquel Fonseca Benito
  3. Moving home again? Never! The migration patterns of highly educated individuals in Sweden By Bjerke, Lina; Mellander, Charlotta
  4. Shaking Dutch Grounds Won't Shatter the European Gas Market By Franziska Holz; Hanna Brauers; Philipp M. Richter; Thorsten Roobeek
  5. Measuring the Unequal Implications of One Size Fits All Regulation By Jeff Thurk
  6. The Deterrent Effect of Voting Against Minarets: Identity Utility and Foreigners' Location Choice By Slotwinski, Michaela; Stutzer, Alois

  1. By: Michel Grabisch (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Christophe Labreuche (UMP CNRS/THALES - Unité mixte de physique CNRS/Thalès - CNRS - THALES)
    Abstract: The GAI (Generalized Additive Independence) model proposed by Fishburn is a generalization of the additive utility model, which need not satisfy mutual preferential independence. Its great generality makes however its application and study difficult. We consider a significant subclass of GAI models, namely the discrete 2-additive GAI models, and provide for this class a decomposition into nonnegative monotone terms. This decomposition allows a reduction from exponential to quadratic complexity in any optimization problem involving discrete 2-additive models, making them usable in practice.
    Abstract: Le modèle GAI (Indépendance Additive Généralisée) proposé par Fishburn est une généralisation du modèle de l'utilité additive, qui ne satisfait pas nécessairement à l'indépendance mutuelle préférentielle. Sa grande généralité rend cependant son usage et son étude difficiles. Nous considérons une sous-classe significative des modèles GAI, précisément les modèles GAI discrets 2-additifs, et nous obtenons pour cette classe une décomposition en termes positifs et croissants. Cette décomposition permet une réduction de la complexité, passant de la complexité exponentielle à la complexité quadratique, pour tout problème d'optimisation utilisant ces modèles discrets 2-additifs, les rendant ainsi utilisables dans la pratique.
    Keywords: Multiattribute utility,Multichoice games,Utilité multi-attribut,jeux multichoix
    Date: 2015–09
  2. By: Dimitris Christelis; Raquel Fonseca Benito
    Abstract: We study transitions in and out of self-employment of older individuals using internationally comparable survey data from 13 OECD countries. We compute selfemployment transitions as conditional probabilities arising from a discrete choice panel data model. We examine the influence on self-employment transitions of labor market policies and institutional factors (employment protection legislation, spending on employment and early retirement incentives, unemployment benefits, strength of the rule of law), as well as individual characteristics like physical and mental health. Selfemployment is strongly affected by government policies: larger expenditures on employment incentives impact it positively, while the opposite is true for expenditures on early retirement and unemployment benefits.
    Keywords: self-employment, transitions, ageing, labor policies, panel,
    JEL: J21 J24 C4
    Date: 2015–11–04
  3. By: Bjerke, Lina (Jönköping International Business School); Mellander, Charlotta (Jönköping International Business School & Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: Two major challenges in Europe’s rural areas are an ageing population and the diminishing share of human capital. While this pattern is not new, the effects are becoming increasingly visible and acute. The long-term loss of younger individuals has in many ways “drained” the labor market and the economic market power of rural areas. This is the focus of our research. Using micro data covering the entire Swedish population, we identify all university graduates from the year 2001. We analyze them with respect to whether they live in a rural or urban region before starting university and where they live at two points in time after graduation. We use a series of multinomial logit regressions to determine what factors affect their short-term and long-term choices of location. We find only minor differences on between these two time-perspectives with a few important exceptions related to civil status and background.
    Keywords: urban-rural youth migration; highly educated
    JEL: I25 R00
    Date: 2015–11–11
  4. By: Franziska Holz; Hanna Brauers; Philipp M. Richter; Thorsten Roobeek
    Abstract: The Netherlands have been a pivotal supplier in Western European natural gas markets in the last decades. Recent analyses show that the Netherlands would play an important role in replacing Russian supplies in Germany and France in case of Russian export disruption (Richter & Holz, 2015). However, the Netherlands have suffered from regular earthquakes in recent years that are related to the natural gas production in the major Groningen field. Natural gas production rates– that are politically mandated in the Netherlands – have consequently been substantially reduced, with an estimated annual production 30% below the 2013 level. We implement a realistically low production path for the next decades in the Global Gas Model and analyze the geopolitical impacts. We find that the diversification of the European natural gas imports allows spreading the replacement of Dutch gas over many alternative sources, with diverse pipeline and LNG supplies.There will be hardly any price or demand reduction effect. Even if Russia fails to supply Europe, the additional impact of the lower Dutch production is moderate. Again, alternative suppliers from various sources are able to replace the Dutch volumes. Hence, the European consumers need not to worry about the declining Dutch natural gas production and their security of supplies.
    Keywords: Natural gas, supply security, Europe, equilibrium modeling
    JEL: C69 L71 Q34
    Date: 2015
  5. By: Jeff Thurk (University of Notre Dame)
    Abstract: We study the implications to consumers of simple one size fits all regulation when consumer tastes are heterogeneous. In particular we focus on spirit sales in the state of Pennsylvania where the Pennsylvania Liquor Control Board administers the sales of spirits and is mandated to charge a uniform 30% markup on all products. We show that consumer tastes vary systematically with demographics and use an estimated discrete choice model of demand for spirits to assess the implications of this simple regulatory policy on different consumer groups. We find the current regulation results in the implicit taxation of high-income and educated households by raising the prices of spirits they prefer (vodka and whiskey) while lowering the price of products favored by low-income and minority households (gin and rum). We identify more sophisticated pricing regulations which increase total welfare, though the resulting transfer of surplus across demographic groups makes them politically infeasible.
    Date: 2015
  6. By: Slotwinski, Michaela (University of Basel); Stutzer, Alois (University of Basel)
    Abstract: This paper uses the vote on the Swiss minaret initiative as a natural experiment to identify the causal effect of negative attitudes towards immigrants on foreigners' location choices and thus indirectly on their utility. Based on a regression discontinuity design with unknown discontinuity points and administrative data on the population of foreigners, we find that the probability of their moving to a municipality that unexpectedly expressed strong reservations decreases initially by about 60 percent. The effect levels off over a period of about 5 months. Consistent with a reduction in the identity utility for immigrants in general, the reaction is not confined to Muslims, whereby high-skilled foreigners seem to be most sensitive to the newly revealed reservations.
    Keywords: attitudes, foreigners, identity utility, location choice, RDD
    JEL: D83 J61 R23 Z13
    Date: 2015–11

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