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on Discrete Choice Models |
| By: | Theocharis N. Grigoriadis; Benno Torgler |
| Abstract: | This paper investigates the role of the State Duma of Russia in energy regulation between 1994 and 2003. We applying Poole’s optimal classification model of roll call votes using an ordered probit model to show impact of partisan, bureaucratic, social and economic determinants on energy law reform in the first decade of Russia’s democratic transition. Our findings suggest that reforms strongly depend on negotiations, compromises and interest equilibrations. The cohesion and accountability of Russian political parties cannot be explained in terms of ideology; the traditional Left-Right axis does not hold in Russian legislative politics. Thus, our results suggest that Russia’s executive federalism and the personal interests of powerful parliamentary actors have the lead in developing competitive market structures in oil, gas and electricity markets. The paradoxical conclusion is that in this turbulent institutional setting State Duma functions as a de facto regulator by contributing to economic transparency and advancing energy law reform under conditions of democratic representation and political competition. |
| Keywords: | energy regulation; energy roll law reform; roll call votes; legislative politics; State Duma; Russia |
| JEL: | Q40 D72 K23 P27 P37 P31 R11 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2006-07&r=dcm |
| By: | Andre de Palma (Université de Cergy-Pontoise, ENPC and Member of Institut Universitaire de France, THEMA, 33); Dunkerley Fay (K.U.Leuven-Center for Economic StudiesAuthor-Name: Proost Stef; K.U.Leuven-Center for Economic Studies; UCL - CORE) |
| Abstract: | In this paper we study how trip chaining affects the pricing and equilibrium number of firms. We use a monopolistic competition model where firms offer differentiated products as well as differentiated jobs to households who are all located at some distance from the firms. Trip chaining means that shopping and commuting can be combined in one trip. The symmetric equilibriums with and without the option of trip chaining are compared. We show analytically that introducing the trip chaining option can, in the short run, only decrease the profit margin of the firms and will increase welfare. The welfare gains are however smaller than the transport cost savings. In the long run, with free entry, the number of firms decreases but welfare with trip chaining possible is still higher than when it is excluded. A numerical illustration gives orders of magnitude of the different effects. |
| Keywords: | trip chaining, discrete choice model, general equilibrium model, imperfect competition, wage competition |
| JEL: | D43 L13 R3 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:etewps:ete0605&r=dcm |
| By: | Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Gråsjö, Urban (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Using the taxonomy by Anselin (2003), this paper investigates how the inclusion of spatially discounted variables on the ‘right-hand-side’ (RHS) in empirical spatial models affects the extent of spatial autocorrelation. The basic proposition is that the inclusion of inputs external to the spatial observation in question as a separate variable reveals spatial dependence via the parameter estimate. One of the advantages of this method is that it allows for a direct interpretation. The paper also tests to what extent significance of the estimated parameters of the spatially discounted explanatory variables can be interpreted as evidence of spatial dependence. Additionally, the paper advocates the use of the accessibility concept for spatial weights. Accessibility is related to spatial interaction theory and can be motivated theoretically by adhering to the preference structure in random choice theory. Monte Carlo Simulations show that the coefficient estimates of the accessibility variables are significantly different from zero in the case of modelled effects. The rejection frequency of the three typical tests (Moran’s I, LM-lag and LM-err) is significantly reduced when these additional variables are included in the model. When the coefficient estimates of the accessibility variables are statistically significant, it suggests that problems of spatial autocorrelation are significantly reduced. Significance of the accessibility variables can be interpreted as spatial dependence |
| Keywords: | accessibility; spatial dependence; spatial econometrics; Monte Carlo Simulations; spatial spillovers |
| JEL: | C31 C51 R15 |
| Date: | 2006–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0051&r=dcm |
| By: | Patrick Bayer; Nathaniel Keohane; Christopher Timmins |
| Abstract: | Conventional hedonic techniques for estimating the value of local amenities rely on the assumption that households move freely among locations. We show that when moving is costly, the variation in housing prices and wages across locations may no longer reflect the value of differences in local amenities. We develop an alternative discrete-choice approach that models the household location decision directly, and we apply it to the case of air quality in U.S. metro areas in 1990 and 2000. Because air pollution is likely to be correlated with unobservable local characteristics such as economic activity, we instrument for air quality using the contribution of distant sources to local pollution – excluding emissions from local sources, which are most likely to be correlated with local conditions. Our model yields an estimated elasticity of willingness to pay with respect to air quality of 0.34 to 0.42. These estimates imply that the median household would pay $149 to $185 (in constant 1982-1984 dollars) for a one-unit reduction in average ambient concentrations of particulate matter. These estimates are three times greater than the marginal willingness to pay estimated by a conventional hedonic model using the same data. Our results are robust to a range of covariates, instrumenting strategies, and functional form assumptions. The findings also confirm the importance of instrumenting for local air pollution. |
| JEL: | H5 Q2 Q5 R1 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12106&r=dcm |
| By: | Kevin Roberts (Nuffield College, Oxford University) |
| Abstract: | For over a quarter of a century, the use of utility information based upon interpersonal comparisons has been seen as an escape route from the Arrow Impossibility Theorem. This paper critically examines this informational basis approach to social choice. Even with comparability of differences and levels, feasible social choice rules must be insensitive to a range of distributional issues. Also, the Pareto principle is not solely to blame for the inability to adopt rules combining utility and non-utility information: if the Pareto principle is not invoked then there is no way of combining utility and non-utility information in a ranking of states unless levels of utility are comparable; with only level comparability, information must be combined in restrictive ways and the notion of giving different independent weight to different considerations is ruled out. If informational bases are viewed as the restriction on information that is available, rather than a theoretical limit on information, then there exist methods to estimate richer informational structures and overcome some of these difficulties. |
| Date: | 2005–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:econwp:0523&r=dcm |
| By: | Christopher Spencer (University of Surrey) |
| Abstract: | In 1997, the Bank of England was granted operational responsibility for setting interest rates to meet a Government inflation target of RPIX 2.5 percent. As part of the shift towards independence, operational decisions on monetary policy were delegated to a Monetary Policy Committee. Using voting data obtained from Minutes of Monetary Policy Committee Meetings, I show that as a group, internally appointed MPC members (insiders) on average prefer higher interest rates than external appointees (outsiders). Further, ordered logit analysis demonstrates that insiders and outsiders are motivated by different concerns when setting interest rates, with the interest rate setting behaviour of outsiders being less easy to predict than those of insiders. |
| Keywords: | Monetary Policy Committee, insiders, outsiders, voting |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:0606&r=dcm |
| By: | Daniele Fabbri; Chiara Monfardini |
| Abstract: | We study practice variation in scheduling of cesarean section delivery across public and private hospitals in Italy. Adopting a novel perspective, we look at the role played by patients’ preferences for the treatment. The recursive probit model is revisited as a useful tool to assess the presence of assortative mating of patients and provider driven by style of practice. According to our evidence the propensity to scheduling a cesarean section is codetermined with patient self-sorting into hospital types. We measure a significantly higher inclination to practice cesarean section scheduling in private hospitals and conclude that assortative mating is of minor relevance in our case, even if we cannot exclude it to be present. |
| Keywords: | practice variation, assortative mating, cesarean section scheduling, recursive probit model |
| JEL: | I11 C15 C35 C52 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp06_06&r=dcm |
| By: | Daniela Del Boca; Daniela Vuri |
| Abstract: | In Italy the participation of women has not increased very much in the last few decades relative to other developed countries and it is still among the lowest in Europe. The female employment rate stands almost 13 percentage points below the EU average and 22 below the Lisbon target. One of the most important reasons is related to the characteristics of child care system. In this paper we analyze the characteristics of the child care system in Italy and its relationship to the labor market participation decision of mothers. We present a simple discrete choice framework in which the two decisions can be jointly considered, which also allows for simple forms of rationing. We go on to estimate a bivariate probit model of the child care and employment decisions and interpret the results within the framework of our model. We find evidence that rationing is an important factor in interpreting price eects on utilization rates and employment decisions. |
| Keywords: | Labor Market Decisions, Fertility, Child care |
| JEL: | J2 C3 D1 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp08_06&r=dcm |