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on Discrete Choice Models |
| By: | Heckman, James J. (University of Chicago); Humphries, John Eric (University of Chicago); Veramendi, Gregory (Arizona State University); Urzua, Sergio (University of Maryland) |
| Abstract: | This paper develops and estimates a model with multiple schooling choices that identifies the causal effect of different levels of schooling on health, health-related behaviors, and labor market outcomes. We develop an approach that is a halfway house between a reduced form treatment effect model and a fully formulated dynamic discrete choice model. It is computationally tractable and identifies the causal effects of educational choices at different margins. We estimate distributions of responses to education and find evidence for substantial heterogeneity in unobserved variables on which agents make choices. The estimated treatment effects of education are decomposed into the direct benefits of attaining a given level of schooling and indirect benefits from the option to continue on to further schooling. Continuation values are an important component of our estimated treatment effects. While the estimated causal effects of education are substantial for most outcomes, we also estimate a quantitatively important effect of unobservables on outcomes. Both cognitive and socioemotional factors contribute to shaping educational choices and labor market and health outcomes. We improve on LATE by identifying the groups affected by variations in the instruments. We find benefits of cognition on most outcomes apart from its effect on schooling attainment. The benefits of socioemotional skills on outcomes beyond their effects on schooling attainment are less precisely estimated. |
| Keywords: | education, early endowments, factor models, health, treatment effects |
| JEL: | C32 C38 I12 I14 I21 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8027&r=dcm |
| By: | Fossen, Frank M.; Glocker, Daniela |
| Abstract: | Stated survey measures of risk preferences are increasingly being used in the literature, and they have been compared to revealed risk aversion primarily by means of experiments such as lottery choice tasks. In this paper, we investigate educational choice, which involves the comparison of risky future income paths and therefore depends on risk and time preferences. In contrast to experimental settings, educational choice is one of the most important economic decisions taken by individuals, and we observe actual choices in representative panel data. We estimate a structural microeconometric model to jointly reveal risk and time preferences based on educational choices, allowing for unobserved heterogeneity in the Arrow-Pratt risk aversion parameter. The probabilities of membership in the latent classes of persons with higher or lower risk aversion are modelled as functions of stated risk preferences elicited in the survey using standard questions. Two types are identified: A small group with high risk aversion and a large group with low risk aversion. The results indicate that persons who state that they are generally less willing to take risks in the survey tend to belong to the latent class with higher revealed risk aversion, which indicates consistency of stated and revealed risk preferences. The relevance of the distinction between the two types for educational choice is demonstrated by their distinct reactions to a simulated tax policy scenario. -- |
| Keywords: | educational choice,stated preferences,revealed preferences,risk aversion,time preference |
| JEL: | I20 D81 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:20143&r=dcm |
| By: | Otello Ardovino; Luca Pennacchio; Giuseppe Piroli |
| Abstract: | Firm innovation capacity depends not only on internal capabilities, but also on external expertise and knowledge acquired through cooperation. This paper analyzes direct and indirect effect of R&D cooperation on the innovation of Italian firms. Using a multivariate probit model to account for the complementarity of four different types of innovation activity and the heterogeneity in the choice of cooperation partners, we find strong and positive direct effects of collaborations with some non-competitive partners (suppliers, clients, private research institutes and consultants). Also R&D cooperation with competitors shows a relevant direct effect on firm innovation. On the contrary, collaborations with university have weaker effects; this could perhaps be due to the short-term perspective adopted in the study. These findings suggest that it is important to look at the specific type of R&D collaborations because they have a different impact on the success of innovative activities. On the other hand, indirect effects are scant and restricted to cooperation with some non-competitive partners. Such a result suggests that absorptive capacity of firms and R&D spillovers are quite weak in Italian context. Lastly, firm size and sector-specific features also affect innovation propensity. |
| Keywords: | R&D collaboration, absorptive capacity, moderating variable, innovation, equation probit model, community innovation survey. |
| JEL: | L13 O30 O32 |
| Date: | 2014–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2014_03&r=dcm |
| By: | Wu, Alfred M.; Ramesh, M. |
| Abstract: | The extent to which social protection programs in general and targeted programs in particular actually alleviate poverty has been a central issue in development debates for decades. The objective of this paper is to contribute to the debate by empirically examining the poverty-alleviation effects of one of the largest targeted programs in the world: the Minimum Living Standard Assistance (MLSA) or Dibao in China. Using newly available data on MLSA spending and a unique panel survey dataset covering the 1993-2009 period, this research investigates the impact of the MLSA on poverty alleviation. The analyses using fixed- and random- effects logit models and hierarchical liner models offer insights that go beyond the existing studies on the subject. Findings from the study confirm that targeted social protection programs are an effective tool for reducing poverty. |
| Keywords: | Dibao, poverty, public assistance, development policy, China |
| JEL: | I32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54358&r=dcm |
| By: | Ignacio Lozano; Alexander Guarín |
| Abstract: | In this paper, we study the empirical relationship between credit funding sources and the financial vulnerability of the Colombian banking system. We propose a statistical model to measure and predict banking-fragility episodes associated with credit funding sources classified into retail deposits and wholesale funds. We compute the probability of financial fragility for both the aggregated banking system and the individual banks. Our approach performs a Bayesian averaging of estimated logit regression models with monthly balance sheet data between 1996 and 2013. The results show the increasing use of wholesale funding to support credit expansion is a potential source of financial fragility. Therefore, monitoring credit funding sources could provide an additional tool to warn against banking disruptions. Classification JEL: C11, C23, C52, C53, G01, G20, G21 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:813&r=dcm |