nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2021‒05‒31
nine papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Bayesian Inference for Parametric Growth Incidence Curves By Edwin Fourrier-Nicolai; Michel Lubrano
  2. Identification and Estimation of Average Partial Effects in Semiparametric Binary Response Panel Models By Laura Liu; Alexandre Poirier; Ji-Liang Shiu
  3. Ordered Reference Dependent Choice By Xi Zhi "RC" Lim
  4. Probabilistic Fixed Ballot Rules and Hybrid Domains By Shurojit Chatterji; Souvik Roy; Soumyarup Sadhukhan; Arunava Sen; Huaxia Zeng
  5. Non Parametric Classes for Identification in Random Coefficients Models when Regressors have Limited Variation By Gaillac, Christophe; Gautier, Eric
  6. The Effect of Providing Peer Information on Evaluation for Gender Equalized and ESG Oriented Firms: An Internet Survey Experiment By Eiji Yamamura
  7. A Random Attention and Utility Model By Nail Kashaev; Victor H. Aguiar
  8. Disposición a pagar por calidad de agua: estimaciones a través de gastos defensivos By Miguel Carriquiry; Maximiliano Machado; Matías Piaggio
  9. Modeling and solving line planning with integrated mode choice By Hartleb, J.; Schmidt, M.E.; Huisman, D.; Friedrich, M.

  1. By: Edwin Fourrier-Nicolai (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Michel Lubrano (School of Economics, Jiangxi University of Finance and Economics, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The growth incidence curve of Ravallion and Chen (2003) is based on the quantile function. Its distribution-free estimator behaves erratically with usual sample sizes leading to problems in the tails. We propose a series of parametric models in a Bayesian framework. A first solution consists in modelling the underlying income distribution using simple densities for which the quantile function has a closed analytical form. This solution is extended by considering a mixture model for the underlying income distribution. However in this case, the quantile function is semi-explicit and has to be evaluated numerically. The alternative solution consists in adjusting directly a functional form for the Lorenz curve and deriving its first order derivative to find the corresponding quantile function. We compare these models first by Monte Carlo simulations and second by using UK data from the Family Expenditure Survey where we devote a particular attention to the analysis of subgroups.
    Keywords: bayesian inference,growth incidence curve,inequality
    Date: 2021–03
  2. By: Laura Liu; Alexandre Poirier; Ji-Liang Shiu
    Abstract: Average partial effects (APEs) are generally not point-identified in binary response panel models with unrestricted unobserved heterogeneity. We show their point-identification under an index sufficiency assumption on the unobserved heterogeneity, even when the error distribution is unspecified. This assumption does not impose parametric restrictions on the unobserved heterogeneity. We then construct a three-step semiparametric estimator for the APE. In the first step, we estimate the common parameters using either conditional logit or smoothed maximum score. In the second step, we estimate the conditional expectation of the outcomes using local polynomial regression given generated regressors that depend on first-step estimates. In the third step, we average this conditional distribution over a subset of conditioning variables to obtain a partial mean which estimates the APE. We show that this proposed three-step APE estimator is consistent and asymptotically normal. We then evaluate its finite-sample properties in Monte Carlo simulations, and illustrate our estimator in a study of determinants of married women's labor supply.
    Date: 2021–05
  3. By: Xi Zhi "RC" Lim
    Abstract: We study how violations of structural assumptions like expected utility and exponential discounting can be connected to reference dependent preferences with set-dependent reference points, even if behavior conforms with these assumptions when the reference is fixed. An axiomatic framework jointly and systematically relaxes general rationality (WARP) and structural assumptions to capture reference dependence across domains. It gives rise to a linear order that determines references points, which in turn determines the preference parameters for a choice problem. This allows us to study risk, time, and social preferences collectively, where seemingly independent anomalies are interconnected through the lens of reference-dependent choice.
    Date: 2021–05
  4. By: Shurojit Chatterji; Souvik Roy; Soumyarup Sadhukhan; Arunava Sen; Huaxia Zeng
    Abstract: We characterize a class of preference domains called hybrid* domains. These are specific collections of preferences that are single-peaked at the extremes and unrestricted in the middle. They are characterized by the familiar properties of minimal richness, diversity and no-restoration. We also study the structure of strategy-proof and unanimous Random Social Choice Functions on these domains. We show them to be special cases of probabilistic fixed ballot rules (or PFBR). These PFBRs are not necessarily decomposable, i.e., cannot be written as a convex combination of their deterministic counterparts. We identify a necessary and sufficient condition under which decomposability holds for anonymous PFBRs.
    Date: 2021–05
  5. By: Gaillac, Christophe; Gautier, Eric
    Abstract: This paper studies point identification of the distribution of the coefficients in some random coefficients models with exogenous regressors when their support is a proper subset, possibly discrete but countable. We exhibit trade-offs between restrictions on the distribution of the random coefficients and the support of the regressors. We consider linear models including those with nonlinear transforms of a baseline regressor, with an infinite number of regressors and deconvolution, the binary choice model, and panel data models such as single-index panel data models and an extension of the Kotlarski lemma.
    Keywords: Identification; Random Coefficients; Quasi-analyticity; Deconvolution
    Date: 2021–05
  6. By: Eiji Yamamura
    Abstract: Internet survey experiment is conducted to examine how providing peer information of evaluation about progressive firms changed individual's evaluations. Using large sample including over 13,000 observations collected by two-step experimental surveys, I found; (1) provision of the information leads individuals to expect higher probability of rising of stocks and be more willing to buy it. (2) the effect on willingness to buy is larger than the expected probability of stock price rising, (3) The effect for woman is larger than for man. (4) individuals who prefer environment (woman's empowerment) become more willing to buy stock of pro-environment (gender-balanced) firms than others if they have the information. (5) The effect of the peer information is larger for individuals with "warm -glow" motivation.
    Date: 2021–05
  7. By: Nail Kashaev; Victor H. Aguiar
    Abstract: We generalize the stochastic revealed preference methodology of McFadden and Richter (1990) for finite choice sets to settings with limited consideration. Our approach is nonparametric and requires partial choice set variation. We only impose a monotonicity condition on attention first proposed by Cattaneo et al. (2020) and a stability condition on the marginal distribution of preferences. Our framework is amenable to statistical testing. These new restrictions extend widely known parametric models of consideration.
    Date: 2021–05
  8. By: Miguel Carriquiry (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Maximiliano Machado (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Matías Piaggio (International Union for the Conservation of Nature)
    Abstract: The provision of drinking water is essential for the health of human beings. In spite of a wide distribution network and of official information about the drinkability and quality of the pipe water provided to households in Montevideo, most of them have chosen to avoid or at least partially substitute its consumption by boiling it, installing filters or by buying bottled water. These choices can be seen as defensive consumption,and provide an opportunity to infer the value that households assign to water quality, through the use non-market valuation techniques. This work identifies factors affecting the decision of using defensive methods in Montevideo together with the magnitude of such expenses. Using data from a survey (conductedas part of this study), we estimate a selection modelin which the first stage identifies factors affecting the probability of employing defensive methods, whereas the second stage identifies the determinants of the expected magnitudes of these expenses. Our findings indicate that socioeconomic variables, perceived-quality and health factors affect both the likelihood of employing defensive methods and the expected magnitude of these expenditures. We find that on average, the monthly per capita expenditure is about $7 dollars, while it is $18 dollars for the average household. This indicates that on aggregate, the population of Montevideo spends about 111 million dollars per year to cope with a perceived deterioration of the water quality received at their homes. The information generated in this studyis a key element for cost-benefit analysis in order to formulate public policies to improve the water provision services (and/or the perceived water quality) in the city and to reduce contamination in the watercourses from pointor diffuse sources.
    Keywords: Water, Willingness to Pay, Ecosystem Services, Averting Behavior
    JEL: Q25 Q53 O13
    Date: 2020–11
  9. By: Hartleb, J.; Schmidt, M.E.; Huisman, D.; Friedrich, M.
    Abstract: We present a mixed-integer linear program (MILP) for line planning with integrated mode and route choice. In contrast to existing approaches, the mode and route decisions are modeled according to the passengers' preferences while commercial solvers can be applied to solve the corresponding MILP. The model aims at finding line plans that maximize the profit for the public transport operator while estimating the corresponding passenger demand with choice models. Both components of profit, revenue and cost, are influenced by the line plan. Hence, the resulting line plans are not only profitable for operators but also attractive to passengers. By suitable preprocessing of the passengers' utilities, we are able to apply any choice model for mode choices using linear constraints. We provide and test means to improve the computational performance. In experiments on the Intercity network of the Randstad, a metropolitan area in the Netherlands, we show the benefits of our model compared to a standard line planning model with fixed passenger demand. Furthermore, we demonstrate with the help of our model the possibilities and limitations for operators when reacting to changes in demand in an optimal way. The results suggest that operators should regularly update their line plan in response to changes in travel demand and estimate the passenger demand during optimization.
    Keywords: line planning, mixed-integer linear program, MILP
    Date: 2021–05–20

This nep-dcm issue is ©2021 by Edoardo Marcucci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.