nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒07‒16
four papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Partial Independence in Nonseparable Models By Matthew Masten; Alexandre Poirier
  2. Aggregation with a mix of indivisible and continuous labor supply decisions: the case of home production By Vasilev, Aleksandar
  3. Multi-attribute decision by sampling: An account of the attraction, comprimise and similarity effects By Ronayne, David & Brown, Gordon D.A.
  4. Learning About Oneself: The Effects of Signaling Academic Ability on School Choice By Bobba, Matteo; Frisancho, Veronica

  1. By: Matthew Masten (Institute for Fiscal Studies); Alexandre Poirier (Institute for Fiscal Studies)
    Abstract: We analyze identi cation of nonseparable models under three kinds of exogeneity assumptions weaker than full statistical independence. The first is based on quantile independence. Selection on unobservables drives deviations from full independence. We show that such deviations based on quantile independence require non-monotonic and oscillatory propensity scores. Our second and third approaches are based on a distance-from-independence metric, using either a conditional cdf or a propensity score. Under all three approaches we obtain simple analytical characterizations of identi ed sets for various parameters of interest. We do this in three models: the exogenous regressor model of Matzkin (2003), the instrumental variable model of Chernozhukov and Hansen (2005), and the binary choice model with nonparametric latent utility of Matzkin (1992).
    Keywords: Nonparametric Identi cation, Partial Identi cation, Sensitivity Analysis, Nonseparable Models, Selection on Unobservables, Instrumental Variables, Binary Choice
    JEL: C14 C21 C25 C26 C51
    Date: 2016–06–21
  2. By: Vasilev, Aleksandar
    Abstract: This note explores the problem of non-convex labor supply decision in an economy with both discrete and continuous labor decisions. In contrast to the setup in Mc- Grattan, Rogerson and Wright (1997), here each household faces an indivisible labor supply choice in the market sector, while it can choose to work any number of hours in the non-market sector. We show how lotteries as in Rogerson (1988) can again be used to convexify consumption sets, and aggregation over individual preferences. With a mix of discrete and continuous labor supply decisions, disutility of non-market work becomes separable from market work, and the elasticity of the latter increases from unity to infinity.
    Keywords: indivisible labor,non-convexities,home production,lotteries,aggregation,discrete-continuous mix
    JEL: E1 J22
    Date: 2016
  3. By: Ronayne, David & Brown, Gordon D.A. (Department of Economics, University of Warwick & Department of Psychology, University of Warwick)
    Abstract: Consumers' choices are typically influenced by choice context in ways that standard models cannot explain. We provide a concise explanation of the attraction, compromise and similarity effects. Value is assumed to be determined by simple dominance relations between choice options and sampled comparators, and selection of comparators is assumed to be systematically influenced by the choice options. In one experiment, participants viewed differing selections of market options prior to choice. The classic context effects appeared and disappeared as predicted. In the second experiment, individuals' sampling distributions of market options were influenced by the choice set as predicted by the model.
    Keywords: consumer choice; decision-making; context effects; sampling.
    JEL: I30 I31
    Date: 2016
  4. By: Bobba, Matteo; Frisancho, Veronica
    Abstract: This paper examines the role of perceived academic ability in shaping curricular choices in secondary school. We design and implement a field experiment that provides individualized feedback on performance in a mock version of the admission test taken to gain entry into high school in the metropolitan area of Mexico City. This intervention reduces the gap between expected and actual performance, shrinks the variance of the individual ability distributions and shifts stated preferences over high school tracks, with better performing students choosing more academically-oriented options. Such a change in application portfolios affects placement outcomes within the school assignment system, while it does not seem to entail any short-term adjustment costs in terms of high school performance. Guided by a simple model in which Bayesian agents choose school tracks based on their perceived ability distribution, we empirically document the interplay between variance reductions and mean changes in beliefs enabled by the information intervention.
    Keywords: information, Bayesian updating, biased beliefs, school choice.
    JEL: D83 I21 I24 J24
    Date: 2016–06

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