nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒05‒28
seven papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Removing Specification Errors from the Usual Formulation of Binary Choice Models* By P. A. V. B. Swamy; I-Lok Chang; Jatinder S. Mehta; William H. Greene; Stephen G. Hall; George S. Tavlas
  2. Preference for the Workplace, Human Capital, and Gender By Matthew Wiswall; Basit Zafar
  3. Determinants of employment and unemployment situation in India with Special reference to North Eastern states of India By Tripathi, Sabyasachi
  4. What Do Farmers Want in the Design of Biofuel Investments in Kenya? A Choice Experiment Approach By Ochieng, Isabel Joy; Otieno, David; Oluoch-Kosura, Willis; Jistrom, Magnus
  5. Getting tired of work, or re-tiring in absence of decent job opportunities? Some insights from an estimated Random Utility/Random Opportunity model on Belgian data By Capéau, Bart; Decoster, André
  6. Consumers’ Willingness to Pay for Genetically Engineered Edamame By Wolfe, Elijah; Popp, Michael; Bazzani, Claudia; Nayga Jr, Rudolfo; Danforth, Diana; Popp, Jennie; Chen, Pengyin; Seo, Han-Seok
  7. Will the Public Pay for Cleaner Air? A Case Study from Metro Manila By Jamil Paolo S. Francisco

  1. By: P. A. V. B. Swamy; I-Lok Chang; Jatinder S. Mehta; William H. Greene; Stephen G. Hall; George S. Tavlas
    Abstract: We develop a procedure for removing four major specification errors from the usual formulation of binary choice models. The model that results from this procedure is different from the conventional probit and logit models. This difference arises as a direct consequence of our relaxation of the usual assumption that omitted regressors constituting the error term of a latent linear regression model do not introduce omitted regressor biases into the coefficients of the included regressors.
  2. By: Matthew Wiswall; Basit Zafar
    Abstract: In this paper, we use a hypothetical choice methodology to robustly estimate preferences for workplace attributes and quantify how much these preferences influence pre-labor market human capital investments. Undergraduate students are presented with sets of job offers that vary in their attributes (such as earnings and job hours flexibility) and asked to state their probabilistic choices. We show that this method robustly identifies preferences for various job attributes, free from omitted variable bias and free from considering the equilibrium matching of workers to jobs. While there is substantial heterogeneity in preferences, we find that women on average have a higher willingness to pay for jobs with greater work flexibility (lower hours, and part-time option availability) and job stability (lower risk of job loss), and men have a higher willingness to pay for jobs with higher earnings growth. Using a follow-up survey several years after the experiment, we find a systematic relationship between the respondents' job preferences as revealed during college and the actual workplace characteristics of the jobs these individuals are currently working at after college. In the second part of the paper, we relate these job attribute preferences to major choice. Using data on students' perceptions about the demand side of the labor market--beliefs about expected attributes of jobs students anticipate being offered if they were to complete particular majors--we find that students perceive jobs offered to Humanities majors to have fewer hours, more work-time flexibility, and higher stability than jobs offered to Economics/Business majors. These job attributes are found to play a role in major choice, with women exhibiting greater sensitivity to non-pecuniary job attributes in major choice.
    JEL: J16 J24
    Date: 2016–04
  3. By: Tripathi, Sabyasachi
    Abstract: The present paper tries to investigate the relevant household level determinants of employment and unemployment situation in India with special reference to North East states of India. For the analysis, Multinomial Logit model is estimated by using latest NSS unit level data on ‘Employment and unemployment’ in 2011-12.The estimated results show that higher amount of land holding increases the probability of becoming self employed persons. But it decreases the probability of becoming casual labourer of the rural worker. Rural females have the lowest probability of becoming wage/salaried worker. Finally, it finds that higher level of education (technical and general) reduces the probability of becoming casual worker/ self employed and increases the chance of becoming wage/salaried worker. Finally, the paper suggests that government needs to consider various household level factors such as age, marital status, religion group, social group, and education level for updating and formulating employment enhancement policies. Further, it urges that macro level policies need to be strengthened by emphasizing on micro level policies, giving due consideration to the development status (backward states/ region, e.g. North East states) for increasing employment opportunities. Emphasis also needs to be laid on level of investment, educational level, social benefits and security of the worker for a healthy and quality employment.
    Keywords: Employment, Unemployment, Multinomial Logit Model, North-East States, India
    JEL: J01 J21 R1
    Date: 2016–05–19
  4. By: Ochieng, Isabel Joy; Otieno, David; Oluoch-Kosura, Willis; Jistrom, Magnus
    Abstract: Emerging forms of investment such as biofuels have intensified pressure on scarce land especially in developing countries. This has implications on household enterprise choice and food security. However, biofuel investments in Sub-Saharan Africa are often undertaken without adequate stakeholder consultations on priorities and preferences. In order to provide insights for managing potential resource conflicts, this study assessed farmers’ preferences on the design of biofuel investments in Kenya. Choice Experiment was used to elicit survey data from 342 farmers, and random parameter model applied in analysis. Results indicated higher positive preferences for short contract lengths, leasing of a quarter of their land, permanent employment and renewable contracts. Compensating surplus estimates showed that farmers who already practice mixed crop-livestock systems required higher compensation to accept biofuel investments. These findings offer insights on the design of biofuel investments as a potential livelihood diversification option.
    Keywords: Biofuel-investments, Farmer preferences, Livelihood diversification., Agricultural and Food Policy, Farm Management,
    Date: 2015
  5. By: Capéau, Bart; Decoster, André
    Abstract: This paper exploits the distinction between preference and opportunity factors in a Random Utility and Random Opportunity (RURO) model of job choice (Aaberge, Dagsvik and Strøm, 1995, and Aaberge, Colombino and Strøm, 1999). We estimate the model on Belgian data (SILC 2007). To investigate to what extent lower labour market participation of elderly is due to changing preferences (executing a job might become less enjoyable with age) or to differences in opportunities (elderly getting less, or less attractive job offers), we use the estimated model to simulate two counterfactuals. In the first, we remove partly the age heterogeneity in opportunities, in the second we remove age heterogeneity in preferences. A comparison of labour market behaviour in these two counterfactuals with the baseline shows that opportunities which decline with age are at least as an important factor in explaining low participation rates for the elderly, as is increasing preference for leisure. The effect of opportunities seems to work primarily through the extensive margin, whereas the effect of preferences is more outspoken in the intensive than in the extensive margin.
    Date: 2016–05–19
  6. By: Wolfe, Elijah; Popp, Michael; Bazzani, Claudia; Nayga Jr, Rudolfo; Danforth, Diana; Popp, Jennie; Chen, Pengyin; Seo, Han-Seok
    Keywords: Edamame, non-hypothetical experimental auction, sensory test, willingness to pay, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, Marketing, Q12, D12,
    Date: 2016
  7. By: Jamil Paolo S. Francisco (Ateneo de Manila University)
    Keywords: cleaner air, Metro Manila, willingness to pay
    Date: 2016–04

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