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on Discrete Choice Models |
| By: | Besedes, Tibor; Deck, Cary; Sarangi, Sudipta; Shor, Mikhael |
| Abstract: | Previous studies have demonstrated that a multitude of options can lead to choice overload, reducing decision quality. Through controlled experiments, we examine sequential choice architectures that enable the choice set to remain large while potentially reducing the effect of choice overload. A specific tournament-style architecture achieves this goal. An alternate architecture in which subjects compare each subset of options to the most preferred option encountered thus far fails to improve performance due to the status quo bias. Subject preferences over different choice architectures are negatively correlated with performance, suggesting that providing choice over architectures might reduce the quality of decisions. |
| Keywords: | choice architecture; choice overload; status quo bias; self-sorting; decision making; experiments |
| JEL: | D03 C91 |
| Date: | 2012–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38173&r=dcm |
| By: | Hyungsik Roger Moon; Matthew Shum; Martin Weidner (Institute for Fiscal Studies and UCL) |
| Abstract: | <p>We extend the Berry, Levinsohn and Pakes (BLP, 1995) random coefficients discrete-choice demand model, which underlies much recent empirical work in IO. We add interactive fixed effects in the form of a factor structure on the unobserved product characteristics. The interactive fixed effects can be arbitrarily correlated with the observed product characteristics (including price), which accommodates endogeneity and, at the same time, captures strong persistence in market shares across products and markets. We propose a two step least squares-minimum distance (LS-MD) procedure to calculate the estimator. Our estimator is easy to compute, and Monte Carlo simulations show that it performs well. We consider an empirical application to US automobile demand.</p> |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:08/12&r=dcm |
| By: | Achtnicht, Martin |
| Abstract: | Motorized individual transport strongly contributes to global CO2 emissions, due to its intensive usage of fossil fuels. Current political efforts addressing this issue (i.e. emission performance standards in the EU) are directed towards car manufacturers. This paper focuses on the demand side. It examines whether CO2 emissions per kilometer is a relevant attribute in car choices. Based on a choice experiment among potential car buyers from Germany, a mixed logit specification is estimated. In addition, distributions of willingness-to-pay measures for an abatement of CO2 emissions are obtained. The results suggest that the emissions performance of a car matters substantially, but its consideration varies heavily across the sampled population. In particular, some evidence on gender, age and education effects on climate concerns is provided. -- |
| Keywords: | Choice experiment,CO2 emissions,Mixed logit,Passenger cars,Willingness to pay |
| JEL: | C25 D12 Q51 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:09058r&r=dcm |
| By: | Shun-ichiro Bessho (Faculty of Economics, Keio University); Masayoshi Hayashi (Faculty of Economics, University of Tokyo) |
| Abstract: | This paper evaluates the 1999 national income tax reform in Japan by comparing the social marginal costs of public funds (SMCFs) for changing the marginal tax rates in different income brackets before the reform occurred. To do so, we estimate the discrete choice model of labor supply using a data set of Japanese households in 1997 derived from the Employment Status Survey. We obtain an analog of the SMCF that allows for labor supply responses along both the intensive and the extensive margins on an individual basis. We generate such SMCFs using a micro-simulation method that utilizes the discrete choice model estimates for household preferences. Based on the simulated SMCFs evaluated using various distributional weights, we find that the value of the SMCF for a 1% increase in the marginal tax rate in any given income bracket decreases as the bracket moves from the bottom to the top. This finding suggests that the national government should have made the Japanese income tax system more progressive rather than less progressive as carried out in the 1999 reform. </table> |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2012cf848&r=dcm |