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on Discrete Choice Models |
| By: | Lauterbach, Josephine; Risius, Antje; Bantle, Christina |
| Keywords: | Marketing, Agribusiness |
| Date: | 2020–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi20:305625&r= |
| By: | Matthew Kovach; Gerelt Tserenjigmid |
| Abstract: | We provide the first behavioral characterization of nested logit, a foundational and widely applied discrete choice model, through the introduction of a non-parametric version of nested logit that we call Nested Stochastic Choice (NSC). NSC is characterized by a single axiom that weakens Independence of Irrelevant Alternatives based on revealed similarity to allow for the similarity effect. Nested logit is characterized by an additional menu-independence axiom. Our axiomatic characterization leads to a practical, data-driven algorithm that identifies the true nest structure from choice data. We also discuss limitations of generalizing nested logit by studying the testable implications of cross-nested logit. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.07155&r= |
| By: | Jourquin, Bart (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | Modal choice models for strategic freight transportation studies covering large inter-regional or international areas generally rely on basic explanatory variables such as transportation costs and transit times. Using origin-destination matrixes, it is also possible to compute an accessibility measure that can further be used as an additional explanatory variable. This paper shows that the inclusion of an accessibility measure in the utility functions used for a logit model significantly improves its predictive power. Moreover, when the refined model is used to compute cost and transit time elasticities, the obtained (absolute) values are somewhat lower. The use of an accessibility measure in the modal choice model has thus a double advantage for policymakers: it improves the predictive power of the freight transport model, giving more accurate traffics on the modal networks, and it avoids overestimations of own and cross-elasticities. |
| Keywords: | Freight transport model ; Modal choice ; Accessibility ; Elasticity |
| Date: | 2021–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021031&r= |
| By: | Massimo Anelli; Felix Koenig |
| Abstract: | This paper develops a revealed-preference approach that uses budget constrain discontinuities to price workplace safety. We track hourly workers who face the decision of how many hours to work at varying levels of Covid-19 risk and leverage state-specific discontinuities in unemployment insurance eligibility criteria to identify the labor supply behavior. Results show large baseline responses at the threshold and increasing responses for higher health risks. The observed behavior implies that workers are willing to accept 34% lower incomes to reduce the fatality rate by one standard deviation, or 1% of income for a one in a million chance of dying. |
| Keywords: | hazard pay, workplace safety, non-wage amenities, partial unemployment insurance, Covid19, labor supply, value of life |
| JEL: | J17 J22 J28 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9469&r= |
| By: | Anelli, Massimo (Bocconi University); Koenig, Felix (Carnegie Mellon University) |
| Abstract: | This paper develops a revealed-preference approach that uses budget constrain discontinuities to price workplace safety. We track hourly workers who face the decision of how many hours to work at varying levels of Covid-19 risk and leverage state-specific discontinuities in unemployment insurance eligibility criteria to identify the labor supply behavior. Results show large baseline responses at the threshold and increasing responses for higher health risks. The observed behavior implies that workers are willing to accept 34% lower incomes to reduce the fatality rate by one standard deviation, or 1% of income for a one in a million chance of dying. |
| Keywords: | hazard pay, workplace safety, non-wage amenities, partial unemployment insurance, COVID-19, labor supply, value of life |
| JEL: | J17 J22 J28 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14919&r= |
| By: | Horton, John J.; Johari, Ramesh; Kircher, Philipp (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | In a model with cheap talk, employers can send messages about their willingness to pay for higher ability workers, which job-seekers can use to direct their search and tailor their wage bid. Introducing such messages leads—under certain conditions—to an informative separating equilibrium which affects the number of applications, types of applications, and wage bids across firms. This model is used to interpret an experiment conducted in a large online labor market: employers were given the opportunity to state their relative willingness to pay for more experienced workers, and workers can easily condition their search on this information. Preferences were collected for all employers, but only treated employers had their signal revealed to job-seekers. In response to revelation of the cheap talk signal, job-seekers targeted their applications to employers of the right “type” and they tailored their wage bids, affecting who was matched to whom and at what wage. The treatment increased measures of match quality through better sorting, illustrating the power of cheap talk to improve market outcomes. |
| Keywords: | Labor market |
| Date: | 2021–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021033&r= |
| By: | Dakyung Seong |
| Abstract: | This paper considers an endogenous binary response model with many weak instruments. We in the current paper employ a control function approach and a regularization scheme to obtain better estimation results for the endogenous binary response model in the presence of many weak instruments. Two consistent and asymptotically normally distributed estimators are provided, each of which is called a regularized conditional maximum likelihood estimator (RCMLE) and a regularized nonlinear least square estimator (RNLSE) respectively. Monte Carlo simulations show that the proposed estimators outperform the existing estimators when many weak instruments are present. We apply our estimation method to study the effect of family income on college completion. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.04811&r= |
| By: | W. Ben McCartney; John Orellana; Calvin Zhang |
| Abstract: | Partisanship and political polarization are salient features of today’s society. We merge deeds records with voter rolls and show that political polarization is more than just “political cheerleading.” Descriptively, homeowners are more likely to sell their homes and move when their next-door neighbors are affiliated with the opposite political party. We use a novel, new-next door neighbor identification strategy along with rich demographic control variables and time by-geography fixed effects to confirm causality. Consistent with a partisanship mechanism, our results are strongest when new next-door neighbors (i) are more likely to be partisan and (ii) live especially close by. Our findings help explain increases in political segregation, improve our understanding of residential choice, and illustrate the importance of political polarization for economic decision-making. |
| Keywords: | Political Polarization; Residential Choice |
| JEL: | D10 H31 R20 |
| Date: | 2021–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:93604&r= |
| By: | Belot, Michele; Kircher, Philipp (Université catholique de Louvain, LIDAM/CORE, Belgium); Muller, Paul |
| Abstract: | We propose a simple method for eliciting individual time preferences without estimating utility functions even in settings where background consumption changes over time. It relies on eliciting preferences for receiving high stakes lottery tickets at different points in time. In a standard intertemporal choice model high rewards decouple lottery choices from variation in background consumption. We validate our elicitation method experimentally on a student sample split into two groups: one asked in December when their current budget is reduced by extraordinary expenditures for Christmas gifts; the other asked in February when no such extra constraints exist. We illustrate an application of our method with unemployed job seekers which naturally have income/consumption variation. |
| Keywords: | Time preferences ; experimental elicitation ; job search ; hyperbolic discounting |
| JEL: | D90 J64 |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021035&r= |