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on Discrete Choice Models |
| By: | Mikolaj Czajkowski (University of Warsaw, Faculty of Economic Sciences, Poland); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews); Karine Nyborg (University of Oslo, Department of Economics, Norway) |
| Abstract: | This paper considers the role which selfish, moral and social incentives and pressures play in explaining the extent to which stated choices over pro-environment behaviours vary across individuals. The empirical context is choices over household waste contracts and recycling actions in Poland. A theoretical model is used to show how cost-based motives and the desire for a positive self- and social image combine to determine the utility from alternative choices of recycling behaviour. We then describe a discrete choice experiment designed to empirically investigate the effects such drivers have on stated choices. Using a latent class model, we distinguish three types of individual who are described as duty-orientated recyclers, budget recyclers and homo oeconomicus. These groups vary in their preferences for how frequently waste is collected, and the number of categories into which household waste must be recycled. Our results have implications for the design of future policies aimed at improving participation in recycling schemes. |
| JEL: | D22 F18 Q41 Q52 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:sss:wpaper:201403&r=dcm |
| By: | Hyeongwoo Kim; Wen Shi |
| Abstract: | This paper empirically investigates the determinants of key benchmark interest rates in China using an array of constrained ordered probit models for quarterly frequency data from 1987 to 2013. Specifically, we estimate the behavioral equation of the People's Bank of China that models their decision-making process for revisions of the benchmark deposit rate and the lending rate. Our findings imply that the PBC's policy decisions are better understood as responses to changes in inflation and money growth, while output gaps and the exchange rate play negligible roles. We also implement in-sample fit analyses and out-of-sample forecast exercises. These tests show robust and reasonably good performances of our models in understanding dynamics of these benchmark interest rates. |
| Keywords: | Monetary Policy; People's Bank of China; Ordered Probit Model; Deposit Rate; Lending Rate; In-Sample Fit; Out-of-Sample Forecast |
| JEL: | E52 E58 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2014-12&r=dcm |
| By: | Jose Apesteguia; Miguel A. Ballester |
| Abstract: | We analyze the use of discrete choice models for the estimation of risk aversion and show a fundamental flaw in the standard random utility model which is commonly used in the literature. Specifically, we find that given two gambles, the probability of selecting the riskier gamble may be larger for larger levels of risk aversion. We characterize when this occurs. By contrast, we show that the alternative random preference approach is free of such problems. |
| Keywords: | Discrete Choice; Structural Estimation; Risk Aversion; Random Utility Models; Random Preference Models. |
| JEL: | C25 D81 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1443&r=dcm |
| By: | Andrea Amaral (ISEG, University of Lisbon); Margarida Abreu (ISEG, University of Lisbon and UECE); Victor Mendes (CMVM and CEFAGE-UE) |
| Abstract: | We use a spatial Probit model to study the effect of contagion between banking systems of different countries. Applied to the late 90’s banking crisis in Asia we show that the phenomena of contagion is better seized using a spatial than a traditional Probit model. Unlike the latter, the spatial Probit model allows one to consider the cascade of cross and feedback effects of contagion that result from the outbreak of one initial crisis in one country or system. These contagion effects may result either from business connections between institutions of different countries or from institutional similarities between banking systems. |
| Keywords: | Spatial probit; Banking crises; Contagion. |
| JEL: | C21 C25 G01 G21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2014_05&r=dcm |
| By: | Francisco J. Bahamonde-Birke; Uwe Kunert; Heike Link; Juan de Dios Ortúzar |
| Abstract: | In January 2013 the interurban passenger transport market in Germany was liberalized and several coach carriers emerged offering an alternative to the Deutsche Bahn, a state owned rail monopoly. The coach carriers have attempted to position themselves not just through lower prices but also through product differentiation, for example marketing their services as the most ecological way to travel. Hence, it is important to consider attitudes and perceptions when analyzing this market. One year after liberalization we conducted a stated-choice experiment among students and employees at the Technical University of Berlin, where participants had to choose between different interurban public transport alternatives (regional and intercity trains or interurban coaches). Additionally, the experiment gathered perception and attitudinal indicators used to construct latent variables. Our results show that attitudes and perceptions indeed affect the way individuals choose between different transport modes and, therefore, they must be taken into account when analyzing the interurban passenger market in Germany. |
| Keywords: | Liberalization, Coach Market, Latent Variables, Hybrid Discrete Choice Modelling, Attitudes and Perceptions |
| JEL: | R41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1415&r=dcm |
| By: | Susanne Berger; Herbert Stocker; Achim Zeileis |
| Abstract: | By discriminating between a lazy manager and a career concerns hypothesis, Aghion et al. (The American Economic Review 2013, 103(1), 277-304) try to disentangle the link between innovation and institutional ownership. Citation-weighted patent counts are used as a proxy for innovation, which motivates the use of count data models. While a replication in a narrow sense confirms their empirical results which are mainly based on Poisson models, an analysis that extends the model framework by count data hurdle models does not yield the same findings. However, a remarkably stable positive correlation of citation-weighted patents and institutional ownership across all model specifications can be shown. |
| Keywords: | innovation, institutional ownership, count data, hurdle model, replication |
| JEL: | C25 G32 O31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2014-24&r=dcm |
| By: | Lucia Lavric (Department of Economics, Duke University); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews) |
| Abstract: | Energy costs are partly driven by environmental policy choices. In this paper, the effects of variations in energy costs – as measured by end-user electricity prices – on firm relocation decisions are investigated. Using a discrete choice model a nd a data base which has not previously been exploited to study this problem, we investigate the effects of variations in energy costs both for a sub-set of re-locating European firms in terms of which country they move to; and then for a larger set of firms in terms of the decision to re-locate or not in response to higher energy prices. We find that energy costs play a significant role in determining relocation destinations, and that this effect is asymmetric between firms moving into and out of a country , and between high energy intensity and low energy intensity sectors. The findings of the paper have implications for the Pollution Havens Hypothesis, since they show the extent to which the effects of climate policy on domestic energy costs can be expected to impact on firm relocation decisions both into and out of a country. |
| Keywords: | firm re-location, energy costs, Pollution Havens Hypothesis, climate policy, carbonleakage |
| JEL: | D22 F18 Q41 Q52 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:sss:wpaper:201402&r=dcm |