nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒04‒16
seven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Single-Crossing Random Utility Models By Jose Apesteguia; Miguel Ángel Ballester
  2. Non-trading behaviour in choice experiments By Ahlheim, Michael; Neidhardt, Jan
  3. Does the Type of Neighbor Matter?: Evidence of heterogeneous Export Spillovers on Domestic Companies in Mexico By Cardoso-Vargas, Carlos-Enrique
  4. Substitution between Online and Offline Advertising: Evidence from the Carbonated Soft Drink Industry By He, Xi; Lopez, Rigoberto A.; Liu, Yizao
  5. Why Do Companies Issue Sukuk? By Paul-Olivier KLEIN; Laurent WEILL
  6. The determinants of household's flood mitigation decisions in France – evidence of feedback effects from past investments By Claire Richert; Katrin Erdlenbruch; Charles Figuières pfi104
  7. Time Aggregation and State Dependence in Welfare Receipt By Bhuller, Manudeep; Brinch, Christian; Königs, Sebastian

  1. By: Jose Apesteguia; Miguel Ángel Ballester
    Abstract: We propose a novel model of stochastic choice: the single-crossing random utility model (SCRUM). This is a random utility model in which the collection of utility functions satisfies the single-crossing property. We offer a characterization of SCRUMs based on three easy-to-check properties: Positivity, Monotonicity and Centrality. The identified collection of utility functions and associated probabilities is basically unique. We establish a stochastic monotone comparative result for the case of SCRUMs and study several generalizations of SCRUMs.
    Keywords: stochastic choice; single-crossing property; random utility models; monotone comparative statics
    JEL: D00
    Date: 2016–03
  2. By: Ahlheim, Michael; Neidhardt, Jan
    Abstract: This paper addresses a methodological problem of choice experiments, namely the problem that respondents sometimes avoid the intellectual effort of thoroughly considering the trade-offs between different alternatives that are the essence of every choice experiment, and tick instead the next best alternative without the necessary deliberation. This kind of behaviour which is called "nontrading" in the respective literature calls into question the validity of choice experiments. In this paper, which is based on an online choice experiment concerned with consumer's tastes for table grapes with 1,000 participants, we suggest possibilities to identify potential non-traders not only by their answering behaviour but also by some general characteristics we found to be typical of this kind of respondent.
    Keywords: Non-Trading Behaviour,Discrete Choice Experiment,Table Grapes
    Date: 2016
  3. By: Cardoso-Vargas, Carlos-Enrique
    Abstract: This document examines whether the agglomeration of foreign processing firms (PCS) assembling imported inputs to make export products favors the incorporation to the export activity or market expansion of domestic companies. Similarly this situation is evaluated by considering ordinary foreign firms (ORD) or not manufactured processed products and non-local hybrid companies (HBR) that act in both regimes of commerce. The theoretical framework guiding the empirical evaluation is based on a simple model inspired by Melitz (2003), which is evaluated by means of a conditional logit model with panel data. The findings show evidence that the concentration of these types of foreign companies increases the probability that domestic companies show a presence in certain markets. Notwithstanding, these export spillovers widely heterogeneous in virtue of the fact that their existence and sphere of influence are associated with their specificity in terms of country or product, as well as with the regime of commerce and the technological capacity used by domestic companies vis-à-vis neighboring foreign companies.
    Keywords: international trade, agglomeration externalities, heterogeneity firms
    JEL: F13 F14 F21
    Date: 2016–02–27
  4. By: He, Xi (University of Connecticut); Lopez, Rigoberto A. (University of Connecticut); Liu, Yizao (University of Connecticut)
    Abstract: This paper uses data collected from hypothetical and non-hypothetical choice-based conjoint survey instruments to estimate willingness to pay for distance-based local food products. The survey was administered to three different groups of respondents: members of a consumer buying club with local and grass-fed market experience, a random sample of Maryland residents, and shoppers at a non-specialty suburban Maryland grocery store. We find that both the random sample of Maryland residents and the grocery store shoppers are willing to pay a premium for local products, but view local and grass-fed production as substitutes. Conversely, members of the consumer buying club are willing to pay significantly less for local than their counterparts, but do not conflate local with other premium attributes, such as grass-fed production.
    Keywords: Online advertising, media substitution, translog cost function, CSDs
    JEL: L13 M37 D12
    Date: 2015–07
  5. By: Paul-Olivier KLEIN (LaRGE Research Center, Université de Strasbourg); Laurent WEILL (LaRGE Research Center, Université de Strasbourg)
    Abstract: This paper investigates the determinants for firms to choose sukuk over conventional bond. We investigate the potential impact of information asymmetries and adverse selection to explain why firms prefer using sukuk. We perform logit regressions of the choice of debt type to determine which characteristics lead a firm to issue a sukuk rather than a bond. We use a dataset of sukuk and conventional bond issuances in Malaysia from 2004 to 2013. We find evidence of the influence of information asymmetries and adverse selection on the choice of the sukuk market.
    JEL: G14 P51
    Date: 2016
  6. By: Claire Richert (IRSTEA, UMR G-EAU, Montpellier); Katrin Erdlenbruch (IRSTEA, UMR G-EAU, Montpellier); Charles Figuières pfi104 (INRA, LAMETA)
    Abstract: In this paper, we investigate the determinants of private flood mitigation in France. We conducted a survey among 331 inhabitants of two flood-prone areas and collected data on several topics, including individual flood mitigation, risk perception, risk experience, and sociodemographic characteristics. We estimate discrete choice models to explain either the presence of precautionary measures implemented by the household, or the intention to take such measures. We test the robustness of the Protection Motivation Theory in France, discuss its scope and investigate the existence of feedback effects from past investments on people's protection intentions. Our results confirm that the Protection Motivation Theory is a relevant framework to describe the mechanisms of private flood mitigation in France, highlighting in particular the importance of threat appraisal, threat experience appraisal, and coping appraisal. Some sociodemographic features are also significant to explain private flood mitigation. Our results also give evidence for feedback effects as they suggest that implementing precautionary measures reduces perceptions of the risk of flooding. The existence of these feedback effects implies that intended measures, rather than implemented ones, should be examined to explore further the determinants of private flood mitigation.
    Keywords: flood, risk, mitigation, risk perception, France
    JEL: Q54 D81 R22
    Date: 2016–03
  7. By: Bhuller, Manudeep (University of Chicago); Brinch, Christian (Norwegian Business School (BI)); Königs, Sebastian (OECD)
    Abstract: Dynamic discrete-choice models are an important tool in studies of state dependence in benefit receipt. A common assumption of such models is that benefit receipt sequences follow a conditional Markov process. This property has implications for how estimated period-to-period benefit transition probabilities should relate when receipt processes are aggregated over time. This paper assesses whether the conditional Markov property holds in welfare benefit receipt dynamics in Norway using high-quality monthly data from administrative records. We find that the standard conditional Markov model is seriously misspecified. Estimated state dependence is affected substantially by the chosen time unit of analysis, with the average treatment effect of past benefit receipt increasing with the level of aggregation. The model can be improved considerably by permitting richer types of benefit dynamics: We find strong evidence for both duration and occurrence dependence in benefit receipt. Allowing for heterogeneity in the entry and persistence processes, we find important disparities in the effects of observed and persistent unobserved characteristics. Based on our preferred model, the month-to-month persistence probability in benefit receipt for a first-time entrant is 37 percentage points higher than the entry rate of an individual without previous benefit receipt. Over a 12-month period, this corresponds to an average treatment effect of 5 percentage points.
    Keywords: time aggregation, Markov property, state dependence, welfare dynamics
    JEL: I38 J60 J64 C23 C41
    Date: 2016–03

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