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on Discrete Choice Models |
| By: | Amel Awadelkarim; Arjun Seshadri; Itai Ashlagi; Irene Lo; Johan Ugander |
| Abstract: | School choice mechanism designers use discrete choice models to understand and predict families' preferences. The most widely-used choice model, the multinomial logit (MNL), is linear in school and/or household attributes. While the model is simple and interpretable, it assumes the ranked preference lists arise from a choice process that is uniform throughout the ranking, from top to bottom. In this work, we introduce two strategies for rank-heterogeneous choice modeling tailored for school choice. First, we adapt a context-dependent random utility model (CDM), considering down-rank choices as occurring in the context of earlier up-rank choices. Second, we consider stratifying the choice modeling by rank, regularizing rank-adjacent models towards one another when appropriate. Using data on household preferences from the San Francisco Unified School District (SFUSD) across multiple years, we show that the contextual models considerably improve our out-of-sample evaluation metrics across all rank positions over the non-contextual models in the literature. Meanwhile, stratifying the model by rank can yield more accurate first-choice predictions while down-rank predictions are relatively unimproved. These models provide performance upgrades that school choice researchers can adopt to improve predictions and counterfactual analyses. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.01801&r=dcm |
| By: | Van Sandt, Anders T.; Hansen, Kristiana M.; Ehmke, Mariah D.; Shinker, JJ; Paige, Ginger; Keller, Mary; Cooper, Kaatie; Landreville, Kristen Dawn |
| Keywords: | Community/Rural/Urban Development, Environmental Economics and Policy, Research Methods/Statistical Methods |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335778&r=dcm |
| By: | Federico Echenique; Gerelt Tserenjigmid |
| Abstract: | We study the testable implications of models of dynamically inconsistent choices when planned choices are unobservable, and thus only "on path" data is available. First, we discuss the approach in Blow, Browning and Crawford (2021), who characterize first-order rationalizability of the model of quasi-hyperbolic discounting. We show that the first-order approach does not guarantee rationalizability by means of the quasi-hyperbolic model. This motivates consideration of an abstract model of intertemporal choice, under which we provide a characterization of different behavioral models -- including the naive and sophisticated paradigms of dynamically inconsistent choice. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.14125&r=dcm |
| By: | Tamara Sheldon; Rubal Dua (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | We offer the most comprehensive analysis to date of global plug-in electric vehicle (PEV) subsidies. We accomplish this by estimating vehicle choice models for 23 countries using 2010–2019 sales data and using counterfactual simulations to assess the cost-effectiveness of PEV incentives. |
| Keywords: | Alternative fuels, Carbon market, Clean technology, Climate change |
| Date: | 2023–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2023-dp02&r=dcm |
| By: | Jose Higueras |
| Abstract: | I study how to regulate firms' access to consumer data when it is used for price discrimination and the regulator possesses non-Bayesian uncertainty about the correlation structure between data and willingness to pay. Therefore, it is unclear how the monopolist will segment the market. I characterize all policies that maximize worst-case consumer surplus: the regulator allows the monopolist to access data, if the database does not reveal a minority group of consumers. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.05822&r=dcm |
| By: | Burra, Lavan T., Sommer, Stephan; Vance, Colin |
| Abstract: | Consumer subsidies are commonly employed to incentivize the purchase of battery electric vehicles (BEVs), but free-ridership potentially undermines their effectiveness. The present study investigates BEV subsidies in Germany, distinguishing their effect between company- and private cars. Drawing on a panel of high-resolution car registration data, we use the estimates from a Poisson pseudo-maximum likelihood model to predict BEV registrations in the absence of the subsidy. We calculate aggregate free-rider rates of 19% for private cars and 43% for company cars. We further find that the cost of the subsidy per induced BEV among private consumers is €5, 400, while it is €7, 215 among companies. Overall, the estimates suggest that the subsidy is considerably less cost effective among company cars, which comprise 55% of new BEV sales. |
| Keywords: | Electric vehicles, consumer subsidy, company cars, free ridership |
| JEL: | H23 L91 Q58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:1015&r=dcm |
| By: | Yiting Chen; Tracy Xiao Liu; You Shan; Songfa Zhong |
| Abstract: | As large language models (LLMs) like GPT become increasingly prevalent, it is essential that we assess their capabilities beyond language processing. This paper examines the economic rationality of GPT by instructing it to make budgetary decisions in four domains: risk, time, social, and food preferences. We measure economic rationality by assessing the consistency of GPT decisions with utility maximization in classic revealed preference theory. We find that GPT decisions are largely rational in each domain and demonstrate higher rationality scores than those of humans reported in the literature. We also find that the rationality scores are robust to the degree of randomness and demographic settings such as age and gender, but are sensitive to contexts based on the language frames of the choice situations. These results suggest the potential of LLMs to make good decisions and the need to further understand their capabilities, limitations, and underlying mechanisms. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.12763&r=dcm |
| By: | David Boto-García (Universitat de les Illes Balears); Veronica Leoni (Universitat de les Illes Balears) |
| Keywords: | hedonic pricing, coastal amenities; capitalization effects; peer-to-peer markets; distance decay. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ubi:deawps:94&r=dcm |
| By: | Wei Tian |
| Abstract: | Policy evaluation in empirical microeconomics has been focusing on estimating the average treatment effect and more recently the heterogeneous treatment effects, often relying on the unconfoundedness assumption. We propose a method based on the interactive fixed effects model to estimate treatment effects at the individual level, which allows both the treatment assignment and the potential outcomes to be correlated with the unobserved individual characteristics. This method is suitable for panel datasets where multiple related outcomes are observed for a large number of individuals over a small number of time periods. Monte Carlo simulations show that our method outperforms related methods. To illustrate our method, we provide an example of estimating the effect of health insurance coverage on individual usage of hospital emergency departments using the Oregon Health Insurance Experiment data. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.01969&r=dcm |