nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2017‒10‒22
three papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. A Multinomial Probit Model with Latent Factors: Identification and Interpretation without a Measurement System By Piatek, Rémi; Gensowski, Miriam
  2. The Impact of Omnivorism on Consumer Choice: The Case of the Book Market By Ekaterina S. Demina; Evgeniy M. Ozhegov
  3. The Dynamics of Solo Self-Employment: Persistence and Transition to Employership By Daniel S.J. Lechmann; Christoph Wunder

  1. By: Piatek, Rémi (University of Copenhagen); Gensowski, Miriam (University of Copenhagen)
    Abstract: We develop a parametrization of the multinomial probit model that yields greater insight into the underlying decision-making process, by decomposing the error terms of the utilities into latent factors and noise. The latent factors are identified without a measurement system, and they can be meaningfully linked to an economic model. We provide sufficient conditions that make this structure identified and interpretable. For inference, we design a Markov chain Monte Carlo sampler based on marginal data augmentation. A simulation exercise shows the good numerical performance of our sampler and reveals the practical importance of alternative identification restrictions. Our approach can generally be applied to any setting where researchers can specify an a priori structure on a few drivers of unobserved heterogeneity. One such example is the choice of combinations of two options, which we explore with real data on education and occupation pairs.
    Keywords: multinomial probit, latent factors, Bayesian analysis, marginal data augmentation, educational choice, occupational choice
    JEL: C11 C25 C35
    Date: 2017–09
  2. By: Ekaterina S. Demina (National Research University Higher School of Economics); Evgeniy M. Ozhegov (National Research University Higher School of Economics)
    Abstract: This research analyzes the impact of the degree of omnivorousness on consumer choice in the book market. Panel Scanner data for 2012-2015 were provided by a Saint Petersburg chain store. The final sample was restricted to 10,789 purchase occasions made by 3,709 loyal clients in 2015. We assessed the degree of omnivorousness through the use of purchase histories of various book genres. A mixed logit model was employed to control for unobserved differences in preferences. The analysis revealed that consumers in the book market are highly heterogeneous, and this is partially explained by their degree of omnivorousness. Concerning such book characteristics like cover type, rating, format size, and publication year, omnivores’ preferences differ from univores’. However, the anticipated distinction in the coefficients of price and number of pages, based on previous researches, was not proved
    Keywords: omnivorism, discrete choice, demand for books, consumer behavior.
    JEL: Z
    Date: 2017
  3. By: Daniel S.J. Lechmann; Christoph Wunder
    Abstract: This study examines dynamics of solo self-employment. In particular, we investigate the extent of true state dependence and cross state dependence, i.e., whether experiencing solo selfemployment causally affects the probability of becoming an employer in the future. We use data from the German Socio-Economic Panel to estimate dynamic multinomial logit models. Our results show that the extent of true (cross) state dependence is rather small. The observed persistence in solo self-employment as well as transitions from solo self-employment to employership can largely be explained by observed and unobserved heterogeneity.
    Keywords: state dependence, dynamic multinomial logit, solo self-employment, own-account worker, stepping stone, German SOEP
    JEL: J23 J62
    Date: 2017

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