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on Discrete Choice Models |
| By: | Hiroaki Kaido; Yi Zhang |
| Abstract: | A growing number of empirical models exhibit set-valued predictions. This paper develops a tractable inference method with finite-sample validity for such models. The proposed procedure uses a robust version of the universal inference framework by Wasserman et al. (2020) and avoids using moment selection tuning parameters, resampling, or simulations. The method is designed for constructing confidence intervals for counterfactual objects and other functionals of the underlying parameter. It can be used in applications that involve model incompleteness, discrete and continuous covariates, and parameters containing nuisance components. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.17973 |
| By: | Jesus Gonzalo; Jean-Yves Pitarakis |
| Abstract: | We propose a two-step procedure to detect cointegration in high-dimensional settings, focusing on sparse relationships. First, we use the adaptive LASSO to identify the small subset of integrated covariates driving the equilibrium relationship with a target series, ensuring model-selection consistency. Second, we adopt an information-theoretic model choice criterion to distinguish between stationarity and nonstationarity in the resulting residuals, avoiding dependence on asymptotic distributional assumptions. Monte Carlo experiments confirm robust finite-sample performance, even under endogeneity and serial correlation. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.13839 |
| By: | Andrea Diem; Christian Gschwendt; Stefan C. Wolter |
| Abstract: | A university degree is a risky investment because of the non-negligible risk of having to drop out of university without graduating. However, the costs of this risk are controversial, as it is often argued that even an uncertified year of study has a value in the labor market. To determine this value causally, however, alternatives to studying must also be considered, which is done here with the help of a discrete choice experiment with a representative sample of over 2, 500 HR recruiters. The result is that dropping out of university with a major closely related to an advertised job leads to similar labor market outcomes as if someone had not studied at all. Without a direct link to a job, however, dropping out of university significantly reduces lifetime earnings. Furthermore, HR recruiters clearly prefer applicants who have used the years without studying for human capital accumulation in an alternative way, for example in the form of a traineeship. |
| Keywords: | Dropouts, hiring decisions, discrete choice experiment, sheepskin effect, willingness to pay, tertiary education |
| JEL: | I26 J23 J24 J31 M51 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0235 |
| By: | Helena Perrone; Fabricio Valiati |
| Abstract: | This paper studies switching behavior and its determinants in auto-insurance markets using a dataset that includes information on policyholder choices and their consideration sets, including alternative contract prices. We show that disregarding consumers' consideration sets and the price of alternative offers, especially the premium offered by the previous insurance at renewal, leads to an overestimation of choice inertia and an understatement of consumer price responsiveness. We also find that previous claim history is a primary determinant of switching behavior, even after controlling for premium differentials and observed and unobserved characteristics of the contract and insurers. Our empirical evidence is consistent with choice inertia driven by learning about the true quality of the firm's service. |
| Keywords: | insurance, price disperison, switching costs, choice sets |
| JEL: | L4 K2 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_646 |
| By: | Shaun da Costa (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Koen Decancq (UA - University of Antwerp); Marc Fleurbaey (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Erik Schokkaert (KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven) |
| Abstract: | The equivalent income is a preference-based, interpersonally comparable measure of well-being.Although its theoretical foundations are well-established, empirical applications remain limited, primarily due to the detailed data requirements on individuals' preferences across various wellbeing dimensions. This paper reviews the literature on preference elicitation methods with a focus on estimating equivalent income. We examine several survey-based methods, including contingent valuation, multi-attribute choice or rating experiments, and life satisfaction regressions. The review highlights the advantages and limitations of each method, emphasizing the considerable scope for methodological improvements and innovations. |
| Keywords: | Equivalent income, Stated preferences, Contingent valuation, Life satisfaction |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04840652 |
| By: | Jianhua Xu (Peking University [Beijing]); Shiwei Fan (Central University of Finance and Economics [Beijing]); Jiakun Zheng (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: | Lack of high-quality value per statistical life (VSL) studies in low- and middle-income countries have been recognized by scholars and analysts in the benefit-cost analysis field for decades. However, progress has been slow in addressing it. We estimated VSL in China using a stated-preference survey in the context of reducing mortality risks associated with COVID-19. The survey was administered in seven cities across China in 2022 with a purposive sampling approach, and consistency checks at different levels of stringency regarding willingness to pay (WTP) for mortality risk reductions of different magnitudes were used to screen respondents. The estimated VSL ranges from 8.0 million to 10.3 million Chinese Yuan, which is higher than previous estimates. Also previous studies found much higher VSL estimates from a subsample obtained with more stringent consistency check requiring that WTP be approximately proportional to the magnitude of mortality risk reduction, we did not find such a difference with our dataset. In addition, based on our anlaysis, respondents in first-tier cities such as Beijing, Shanghai and Guangzhou have higher VSL than those in second-tier cities such as Changchun, Chengdu, Wuhan and Xi'an; the VSL-age relationship shows a U-shaped pattern; and the collective experience of city lockdown has a negative impact on VSL. Other factors which were found to influence VSL include education, sector of work, health status, risk perception, behaviors (physical exercises, wearing face masks, getting vaccinated), knowledge, political identity, and trust in government. |
| Keywords: | Willingness to pay, Mortality risk reductions, Value per statistical life VSL, Value per statistical life, vsl, COVID-19 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04909840 |
| By: | Zeddies, Hendrik Hilmar; Parlasca, Martin; Qaim, Matin |
| Abstract: | Competition for land is a key challenge for decarbonized energy transitions. Open-space solar energy farms are gaining in importance but have large land requirements and displace agricultural production. Agrivoltaics offers a compromise, integrating solar panels into existing farming operations. However, adoption of Agrivoltaics remains limited, as it has lower energy output per hectare and higher installation costs than open-space solar. Here, we compare public attitudes towards Agrivoltaics and open-space solar in Germany, using experimental data from a nationally representative sample. Participants were shown three images of a landscape that only differed in terms of land use, namely an agricultural field without solar, an Agrivoltaics system, and an open-space solar system, together with some technical information. While both solar systems have perceived negative impacts on landscape attractiveness, the impacts are less negative for Agrivoltaics. In comparison to their regular electricity bill, 44% of the participants expressed their willingness to pay more for electricity from Agrivoltaics, compared to 29% for electricity from open-space solar. We also find a higher monetary willingness to pay for Agrivoltaics. These results hold across different agricultural systems, implying that Agrivoltaics could play an important role for socially-acceptable energy transitions. More widespread Agrivoltaics adoption may depend on targeted policy support. |
| Keywords: | Resource /Energy Economics and Policy |
| Date: | 2025–02–14 |
| URL: | https://d.repec.org/n?u=RePEc:ags:ubzefd:349432 |