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on Discrete Choice Models |
| By: | Florian Heiss; Daniel McFadden; Joachim Winter (Mannheim Research Institute for the Economics of Aging (MEA)) |
| JEL: | C25 C61 C81 D12 D91 H51 |
| Date: | 2008–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:mea:meawpa:08156&r=dcm |
| By: | Maarten van Rooij; Federica Teppa |
| Abstract: | The default option in individual decision making has proved to be a major attractor in a large number of situations, but we still have little information on the reasons why decision makers so often stick to the default choice. We have devised a new module for the Dutch DNB Household Survey to learn about default behavior and to discriminate between potential explanations. The main contributions of this paper are as follows. First, we identify potential explanations for default choices (including procrastination, inertia, illiteracy, obedience and regret aversion). Second, we provide empirical evidence on their relative importance in a large number of situations. Third, our survey data allow us to analyze the entire population distribution instead of selected groups (like workers, or students) and to control for a rich set of personal characteristics, as well as for labor market status, income, and wealth. Our findings confirm that the default choice plays a key role in individual decision making. Inaddition, we show that its relevance differs across domains: the default option attracts the majority of preferences in situations where the marginal disutility associated with postponing the decision is relatively low, or where the choice problem is increasingly complex. Moreover, we find that even though choice behavior is principally driven by different reasons across different situations overall procrastination and financial illiteracy provide the mostpowerful explanations for why people stick to the default. |
| Keywords: | default options; individual preferences; individual decision making; behavioral economics; procrastination; financial literacy |
| JEL: | D12 D80 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:165&r=dcm |
| By: | Bernard Monjardet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | We first present the concept of duality appearing in order theory, i.e. the notions of dual isomorphism and of Galois connection. Then, we describe two fundamental dualities, the duality extension/intention associated with a binary relation between two sets, and the duality between implicational systems and closure systems. Finally, we present two "concrete" dualities occuring in social choice and in choice functions theories. |
| Keywords: | antiexchange closure operator, Galois connection, implicational system, path-independent choice function, simple game. |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00202326_v1&r=dcm |
| By: | Jean Boivin; Marc Giannoni |
| Abstract: | In this paper, we quantify the changes in the relationship between international forces and many key US macroeconomic variables over the 1984-2005 period, and analyze changes in the monetary policy transmission mechanism. We do so by estimating a Factor-Augmented VAR on a large set of US and international data series. We find that the role of international factors in explaining US variables has been changing over the 1984-2005 period. However, while some US series have become more correlated with global factors, there is little evidence suggesting that these factors have become systematically more important. We don't find strong evidence of a change in the transmission mechanism of monetary policy due to global forces. Taking our point estimates literally, global forces do not seem to have played an important role in the US monetary transmission mechanism between 1984 and 1999. In addition, since the year 2000, the initial response of the US economy following a monetary policy shock --- the first 6 to 8 quarters --- is essentially the same as the one that has been observed in the 1984-1999 period. However, point estimates suggest that the growing importance of global forces might have contributed to reducing some of the persistence in the responses, two or more years after the shocks. Overall, we conclude that if global forces have had an effect on the monetary transmission mechanism, this is a recent phenomenon. |
| JEL: | C32 C53 E31 E32 E40 F41 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13736&r=dcm |
| By: | Simona Rasciute (Dept of Economics, Loughborough University); Eric J. Pentecost (Dept of Economics, Loughborough University) |
| Abstract: | This paper generalizes the existing empirical literature on the determinants of the location of FDI, using a nested logit (NL) model and a novel three-level dataset to examine the factors explaining 1,108 foreign investment location decisions into 13 Central and Eastern European countries (CEECs) between 1997 and 2007. The NL model relaxes the multinomial logit model assumption of independence of identically distributed error terms and allows for testing if national boundaries affect the investment location choices of MNEs in the CEECs. In contrast to the existing empirical literature on the investment location choices, the Heteroskedastic Extreme Value model is used as a tool to reveal an appropriate nesting structure. The highly significant empirical results, based on a general underlying economic model of imperfect competition, show that the responsiveness of FDI in the CEECs to country-level variables differs both across sectors and across firms of different sizes and profitability. Hence the results of previous studies that used only country-level data or only industry- and firm-level data may be misleading. |
| Keywords: | Nested logit model, foreign direct investment, multi-level data, heteroskedastic extreme value model |
| JEL: | F23 P33 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2007_29&r=dcm |
| By: | Rinaldo Brau (University of Cagliari, Italy.); Antonello E. Scorcu (University of Bologna and The Rimini Centre for Economics Analysis, Italy.); Laura Vici (University of Bologna, Italy.) |
| Abstract: | In this paper we assess the appeal of potential interventions on the tourism offer of Rimini, a popular Italian seaside holiday destination, by means of a choice modelling analysis. Tourism can be viewed as a composite good, its overall utility depending on the arrangement of the component characteristics. Our discrete choice experiments incorporate as attributes a number of possible changes to current tourist activities (the subject of public debate), including them in hypothetical alternative holiday packages. The conditional logit analysis indicates that tourists show lesser preference for interventions aimed at protecting the environmental integrity of the beach and greater preference for those, such as the creation of a pedestrianised seafront with late-night opening of amenities and facilities, that are likely to diminish the role of the traditional sea, sun and sand component of the overall holiday experience. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:51-07&r=dcm |