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on Discrete Choice Models |
| By: | Theocharis N. Grigoriadis; Benno Torgler |
| Abstract: | This paper investigates the relative impact of regional energy production on the legislative choices of Russian Duma deputies on energy regulation between 1994 and 2003. We apply Poole’s optimal classification method of roll call votes using an ordered probit model to explain energy law reform in the first decade of Russia’s democratic transition. Our goal is to analyze the relative importance of home energy on deputies’ behavior, controlling for other factors such as party affiliation, electoral mandate, committee membership and socio-demographic parameters. We observe that energy resource factors have a considerable effect on deputies’ voting behavior. On the other hand, we concurrently find that regional economic preferences are constrained by the public policy priorities of the federal center that continue to set the tone in energy law reform in post-Soviet Russia. |
| Keywords: | energy regulation; energy roll law reform; energy resources; roll call votes; legislative politics; State Duma; Russia |
| JEL: | Q40 D72 K23 P27 P37 P31 R11 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2006-25&r=dcm |
| By: | John Beshears; James J. Choi; David Laibson; Brigitte C. Madrian |
| Abstract: | Many financial decisions that individuals face are complicated and daunting for those who are not financial experts. One important consequence of this complexity is that individuals procrastinate in making these decisions. In this paper, we evaluate a low-cost intervention designed to simplify the retirement saving decision. Individuals received the opportunity to enroll in their workplace savings plan at a pre-selected contribution rate and asset allocation. By collapsing a multidimensional set of options into a binary choice between the status quo and the pre-selected alternative, this intervention increases participation rates by 10 to 20 percentage points among affected employees. We find that similar mechanisms can be used to increase contribution rates among employees who are already participating. |
| JEL: | D12 D14 D83 G11 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12659&r=dcm |
| By: | Joan Jasiak (Department of Economics, York University); D. Feng; C. Gourieroux |
| Abstract: | Information on the expected changes in credit quality of obligors is contained in credit migration matrices which trace out the movements of firms across ratings categories in a given period of time and in a given group of bond issuers. The rating matrices provided by Moody’s, Standard &Poor’s and Fitch became crucial inputs to many applications, including the assessment of risk on corporate credit portfolios (CreditVar) and credit derivatives pricing. We propose a factor probit model for modeling and prediction of credit rating matrices that are assumed to be stochastic and driven by a latent factor. The filtered latent factor path reveals the effect of the economic cycle on corporate credit ratings, and provides evidence in support of the PIT (point-in-time) rating philosophy. The factor probit model also yields the estimates of cross-sectional correlations in rating transitions that are documented empirically but not fully accounted for in the literature and in the regulatory rules established by the Basle Committee. |
| Keywords: | Credit Rating, Migration, Migration Correlation, Credit Risk, Probit Model, Latent Factor, Business Cycle. |
| JEL: | C10 |
| Date: | 2006–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:yca:wpaper:2006_2&r=dcm |
| By: | Elisabetta Strazzera (DRES and Crenos, University of Cagliari, Italy); Margarita Genius (Department of Economics, University of Crete, Greece); Riccardo Scarpa (Department of Environment, University of York, U.K.); George Hutchinson (Department of Agricultural and Food Economics, Queens University, U.K.) |
| Abstract: | Contingent Valuation studies are often characterized by a considerable amount of protest responses, which may have an important effect on the final estimates if the protest responses are not randomly distributed across the sample. If the standard procedure of censoring protest responses is adopted, the estimates may be biased. Sample selection models can detect and –if necessary- correct selectivity bias. We apply a sample selection model to data on valuation of forest resources for recreational use, where WTP responses are obtained through a mixed dichotomous choice-open ended elicitation method. Dealing with continuous data for WTP allows us to apply the Heckman 2-steps method, and compare it to the full ML estimator. Either method has its own drawback: computational complexity for the ML method, susceptibility to collinearity problems for the 2-steps method. The latter is observed in our model. The results show that censoring protest responses in this study would lead to overestimates of the willingness to pay. |
| Keywords: | Contingent Valuation; Protest responses; Sample selection; MLE; Two-steps method. |
| URL: | http://d.repec.org/n?u=RePEc:crt:wpaper:0106&r=dcm |
| By: | Margarita Genius (Department of Economics, University of Crete, Greece); Christos Pantzios; Vangelis Tzouvelekas (Department of Economics, University of Crete, Greece) |
| Abstract: | The objective of the paper is to model the degree of organic farming adoption as well as the importance of technical information acquisition in the adoption decision process. In doing so, a trivariate ordered probit model is specified and implemented in the case of organic farming adoption in Crete, Greece. The results suggest that the decisions of information acquisition and adoption are indeed correlated and different farming information sources play a complementary role. Policies required to encourage organic farming adoption should be primarily structural while the provision of technical information is more crucial than conversion subsidies if total organic adoption is to be pursued. |
| Keywords: | Technology adoption, information acquisition, organic farming, Crete, Greece |
| JEL: | Q16 O31 D21 C35 |
| URL: | http://d.repec.org/n?u=RePEc:crt:wpaper:0305&r=dcm |
| By: | Hazama, Yasushi |
| Abstract: | Recent studies have shown that party systems in emerging democracies do not always adequately reflect the various cleavages of society. Under such circumstances, retrospective voting may play a more important role than cleavage voting in determining electoral outcomes. For studies of retrospective voting, the choice between macro and micro level as the independent variable is a major methodological issue. Using individual-level data on Turkey, this paper addresses two major questions: (1) Are voters' decisions based on household economic conditions or national economic conditions? Do sociopolitical conditions also count? (2) Does the future evaluation of the economy affect voting decisions apart from past evaluation? Logit models are used in this research to answer these questions. |
| Keywords: | Retrospective voting, Elections, Turkey |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper46&r=dcm |