nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2021‒08‒16
six papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Nested Pseudo Likelihood Estimation of Continuous-Time Dynamic Discrete Games By Jason R. Blevins; Minhae Kim
  2. Estimating the effects of universal transfers: new ML approach and application to labor supply reaction to child benefits By Filip Premik
  3. Voting vs. non-voting in Senegal: A nested multinomial logit model approach By Henning, Christian H. C. A.; Diaz, Daniel; Petri, Svetlana
  4. Non-compliance with temporary agency work regulations: Initial evidence from Germany By Ganserer, Angelika
  5. Consumer Search and Choice Overload By Volker Nocke; Patrick Rey
  6. Where do I rank? Am I happy?: learning income position and subjective-wellbeing in an internet experiment By Eiji Yamamura

  1. By: Jason R. Blevins; Minhae Kim
    Abstract: We introduce a sequential estimator for continuous time dynamic discrete choice models (single-agent models and games) by adapting the nested pseudo likelihood (NPL) estimator of Aguirregabiria and Mira (2002, 2007), developed for discrete time models with discrete time data, to the continuous time case with data sampled either discretely (i.e., uniformly-spaced snapshot data) or continuously. We establish conditions for consistency and asymptotic normality of the estimator, a local convergence condition, and, for single agent models, a zero Jacobian property assuring local convergence. We carry out a series of Monte Carlo experiments using an entry-exit game with five heterogeneous firms to confirm the large-sample properties and demonstrate finite-sample bias reduction via iteration. In our simulations we show that the convergence issues documented for the NPL estimator in discrete time models are less likely to affect comparable continuous-time models. We also show that there can be large bias in economically-relevant parameters, such as the competitive effect and entry cost, from estimating a misspecified discrete time model when in fact the data generating process is a continuous time model.
    Date: 2021–08
  2. By: Filip Premik (Group for Research in Applied Economics (GRAPE))
    Abstract: This paper evaluates effects of introduction of a universal child benefit program on female labor supply. Large scale government interventions affect economic outcomes through different channels of various magnitude and direction of the effects. In order to account for this feature, I develop a model in which a woman decides whether to participate in the labor market in a given period. I show how to use the resulting decision rules to explain flows in aggregate labor supply and simulate counterfactual paths of labor force. My framework combines flexibility of reduced form approaches with an appealing structure of dynamic discrete choice models. The model is estimated nonparametrically using recent advances in machine learning methods. The results indicate a 2-4 percentage points drop in labor force among the eligible females, mainly driven by changes in women's perceived trade-offs and beliefs that discouraged inflows.
    Keywords: child benefits, labor supply, program evaluation, difference-in-difference estimation, covariate balancing propensity score
    JEL: C21 C23 I38 J22
    Date: 2021
  3. By: Henning, Christian H. C. A.; Diaz, Daniel; Petri, Svetlana
    Abstract: In democratic systems, elections are considered a mechanism to ensure that efficient policies seeking the wellbeing of the population are implemented by the government, although the reality often reflects the opposite. Governments usually act inefficiently due to problems of government performance such as capture and low accountability. In the African continent, the republic of Senegal is considered an example of a stable democracy. Electoral processes in the country have been considered relatively fair. However, the decline in the voter turnout over the past elections suggests that the party system is failing to engage voters. This study assesses influencing factors both in voting behavior in Senegal and in the decision to abstain. We estimated nested multinomial logit models including the alternative Abstention to determine the importance of the non-voters group in the policy making process. We found that even though people in general make their decision more non-policy oriented, abstainers, compared to those who cast a vote, tend to choose more retrospectively oriented and less policy and nonpolicy oriented. Furthermore, our findings show that this group of non-voters hold the government more accountable and have a higher political weight for the incumbent party. Thus, they could incentive the government to choose and implement more efficient policies. [...]
    Keywords: probabilistic voter model,capture,accountability,agricultural policy,Senegal,Africa
    JEL: Q18 C31 C35 C38
    Date: 2020
  4. By: Ganserer, Angelika
    Abstract: Temporary agency work and outsourcing to a service contractor are two forms of alternative work arrangements with rather complex legal aspects which firms use for external staffing. The regulatory complexity of temporary agency work can lead to intended or unintended non-compliance when firms outsource to a service contractor. In this paper, I provide first evidence for non-compliance with temporary agency work regulations when firms contract out on the basis of a unique new firm survey. By exploiting a choice experiment, I demonstrate that firms do understand the regulatory baseline of temporary agency work, although detailed knowledge often seems to be missing. Non-compliance with regulations therefore often results from ignorance of the legal grayzone.
    Keywords: temporary agency work,contracting out,compliance,choice experiment
    JEL: K31 J41 J83 M55
    Date: 2021
  5. By: Volker Nocke; Patrick Rey
    Abstract: We study a model in which a monopoly seller decides which among a set of heterogeneous products to offer, and what prices to charge, and consumers engage in costly (random) sequential search to learn prices and valuations. We show that the equilibrium exhibits choice overload: The larger the product line, the fewer consumers start searching. We provide conditions under which the equilibrium size of the product line is socially excessive (or insufficient). We also characterize equilibria when the seller can position products, thereby allowing the possibility of directed search, and disclose product identity. We show that the best equilibrium for the seller may involve randomizing over product positioning and inducing inefficient search. Finally, we extend our analysis to that of a platform choosing which sellers to host.
    Keywords: sequential consumer search, product variety, choice overload, multiproduct firm, platform
    JEL: L12 L15 D42
    Date: 2021–08
  6. By: Eiji Yamamura
    Abstract: A tailor-made internet survey experiment provides individuals with information on their income positions to examine their effects on subjective well-being. In the first survey, respondents were asked about their household income and subjective well-being. Based on the data collected, three different respondents' income positions within the residential locality, within a group of the same educational background, and cohort were obtained. In the follow-up survey for the treatment group, respondents are informed of their income positions and then asked for subjective well-being. Key findings are that, after obtaining information, a higher individual's income position improves their subjective well-being. The effects varied according to individual characteristics and proxies.
    Date: 2021–07

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.