nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2018‒05‒14
four papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Estimating the Value of Crop Diversity Conservation Services Provided by the Czech National Programme for Agrobiodiversity By Nicholas Tyack; Milan Scasny
  2. Identifying Effects of Multivalued Treatments By Sokbae Lee; Bernard Salani\'e
  3. Sufficient Statistics for Unobserved Heterogeneity in Structural Dynamic Logit Models By Victor Aguirregabiria; Jiaying Gu; Yao Luo
  4. SMOKERS ARE DIFFERENT: THE HETEROGENEITY OF SMOKERS’ RESPONSES TO PRICE INCREASES By Paolo Liberati; Francesco Crespi; Massimo Paradiso; Simone Tedeschi; Antonio Scialà

  1. By: Nicholas Tyack (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic; The Graduate Institute of International and Development Studies, Geneva); Milan Scasny (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic; Charles University Environment Center, Prague)
    Abstract: We estimate the willingness-to-pay (WTP) for conserving crop varieties for ten years in the Czech Republic using a double-bounded dichotomous choice model to analyze data collected with an online contingent valuation survey administered to a main country-wide sample of 1037 respondents and a smaller sub-sample of 500 representative of the agricultural region of South Moravia. Mean WTP was found to be about $9 for both the Czech and S. Moravian sub-samples, corresponding to country-wide benefits of $68 million. These benefits increase by 5% for every ten varieties conserved, implying total welfare benefits of $80 million for a program conserving the maximum number of 35 additional crop varieties. The study reveals the previously unmeasured social benefits of crop conservation activities in the Czech Republic, and illustrates an empirical approach of potential value for policymakers responsible for determining funding levels for genetic resource conservation.
    Keywords: Crop diversity; plant genetic resources for food and agriculture (PGRFA); public goods; contingent valuation; double-bounded dichotomous choice
    JEL: Q18 Q51 Q57
    Date: 2018–04
  2. By: Sokbae Lee; Bernard Salani\'e
    Abstract: Multivalued treatment models have typically been studied under restrictive assumptions: ordered choice, and more recently unordered monotonicity. We show how treatment effects can be identified in a more general class of models that allows for multidimensional unobserved heterogeneity. Our results rely on two main assumptions: treatment assignment must be a measurable function of threshold-crossing rules, and enough continuous instruments must be available. We illustrate our approach for several classes of models.
    Date: 2018–04
  3. By: Victor Aguirregabiria; Jiaying Gu; Yao Luo
    Abstract: We study the identification and estimation of structural parameters in dynamic panel data logit models where decisions are forward-looking and the joint distribution of unobserved heterogeneity and observable state variables is nonparametric, i.e., fixed-effects model. We consider models with two endogenous state variables: the lagged decision variable, and the time duration in the last choice. This class of models includes as particular cases important economic applications such as models of market entry-exit, occupational choice, machine replacement, inventory and investment decisions, or dynamic demand of differentiated products. The identification of structural parameters requires a sufficient statistic that controls for unobserved heterogeneity not only in current utility but also in the continuation value of the forward-looking decision problem. We obtain the minimal sufficient statistic and prove identification of some structural parameters using a conditional likelihood approach. We apply this estimator to a machine replacement model.
    Keywords: Panel data discrete choice models; Dynamic structural models; Fixed effects; Unobserved heterogeneity; Structural state dependence; Identification; Sufficient statistic.
    JEL: C23 C25 C41 C51 C61
    Date: 2018–05–10
  4. By: Paolo Liberati; Francesco Crespi; Massimo Paradiso; Simone Tedeschi; Antonio Scialà
    Abstract: This paper contributes to the understanding of smokers’ responses to cigarette prices increases, with a focus on heterogeneity across individuals and over price changes. A stated preference quasi-experimental design grounded on a random utility framework is proposed, based on individual-level data drawn from a survey gathering detailed information on Italian smokers’ habits. On average, the predicted probability of reducing cigarettes consumption increases with the price variation, even though a huge heterogeneity of price responsiveness is found. In terms of potential price elasticity, a polarisation between low and high responsiveness individuals has also been identified. Finally, by comparing even and uneven price variations across price classes, it is shown that uniform across-brand price increases limit product substitutions and downtrading. Estimated heterogeneity provides information to forecast the effect on tax revenue of a tax-driven price change, and some guidance on how to design tax reforms to balance health and revenue goals.
    Keywords: : Smoking behaviour, Preference heterogeneity, Price elasticity, Tobacco tax, Random utility models
    JEL: I12 I18 C25
    Date: 2018–05

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