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on Discrete Choice Models |
| By: | Carolina Caetano; Gregorio Caetano; Hao Fe; Eric R. Nielsen |
| Abstract: | We propose a simple test of the main identification assumption in models where the treatment variable takes multiple values and has bunching. The test consists of adding an indicator of the bunching point to the estimation model and testing whether the coefficient of this indicator is zero. Although similar in spirit to the test in Caetano (2015), the dummy test has important practical advantages: it is more powerful at detecting endogeneity, and it also detects violations of the functional form assumption. The test does not require exclusion restrictions and can be implemented in many approaches popular in empirical research, including linear, two-way fixed effects, and discrete choice models. We apply the test to the estimation of the effect of a mother's working hours on her child's skills in a panel data context (James-Burdumy 2005). |
| Keywords: | Bunching; Discrete-choice models; Endogeneity; Identification test; Linear models; Two-way fixed effects |
| JEL: | C12 C21 C23 C24 |
| Date: | 2021–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2021-68&r= |
| By: | Bernard, René; Tzamourani, Panagiota; Weber, Michael |
| Abstract: | This paper studies the causal effect of providing information about climate change on individuals' willingness to pay to offset CO2 emissions in a randomized control trial. Individuals that receive truthful information aboutways to reduce CO2 emissions increase their willingness to pay for CO2 offsetting relative to the control group in a within individual research design. Individuals receiving information about the behavior of peers react similarly to those receiving information about scientific research. Individuals' responses vary depending on their sociodemographic characteristics and also along a rich set of attitudes and concerns regarding climate change. In a follow up survey, we study the endogenous information acquisition of survey participants and show that individuals choose information that aligns with their prior beliefs. Individuals who choose to receive information about climate change have a higher willingness to to pay. |
| Keywords: | climate change,information treatment,willingness to pay,C02 compensation,information acquisition |
| JEL: | D10 D83 D91 Q54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc21:242592&r= |
| By: | Yuya Sasaki; Takuya Ura |
| Abstract: | Panel data often contain stayers (units with no within-variations) and slow movers (units with little within-variations). In the presence of many slow movers, conventional econometric methods can fail to work. We propose a novel method of robust inference for the average partial effects in correlated random coefficient models robustly across various distributions of within-variations, including the cases with many stayers and/or many slow movers in a unified manner. In addition to this robustness property, our proposed method entails smaller biases and hence improves accuracy in inference compared to existing alternatives. Simulation studies demonstrate our theoretical claims about these properties: the conventional 95% confidence interval covers the true parameter value with 37-93% frequencies, whereas our proposed one achieves 93-96% coverage frequencies. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.12041&r= |
| By: | Ayushi Bajaj (Monash University); Nikhil Damodaran (O.P. Jindal Global University) |
| Abstract: | Consumer payment choice is based on heterogeneous preferences, availability, usage costs, and effective taxes. We examine the consequences of this choice on consumption distribution, aggregate output, welfare and the shadow economy. We analyze India’s sudden demonetization of 86% of the cash in circulation with new notes gradually being replaced over the next several months. The welfare cost of this liquidity shock was equivalent to 1% of total consumption. Even though all consumers experienced a decline in welfare, its extent varied depending on the degree of cash dependence and the ability to switch to non-cash payments. The middle consumption deciles were disproportionately affected. |
| Keywords: | Money, Payments, Shadow economy, Demonetization, Monetary policy |
| JEL: | D83 E41 E52 E58 O17 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2021-15&r= |
| By: | Serge Blondel (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - Institut National de l'Horticulture et du Paysage, LIRAES - EA 4470 - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UP - Université de Paris); François Langot (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, IUF - Institut Universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPREMAP - Centre pour la recherche économique et ses applications - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Judith Mueller (EHESP - École des Hautes Études en Santé Publique [EHESP], Institut Pasteur [Paris]); Jonathan Sicsic (LIRAES - EA 4470 - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UP - Université de Paris) |
| Abstract: | This paper shows that prospect theory, extended to account for differences across individuals in their patience and their valuation of the vaccination as a common good can explain why more than 40% of the population has intent to reject the Covid-19 vaccination, as well as the differences in vaccination intentions across population subgroups. Indeed, prospect theory by over-weighting the side effect explains the reject of vaccination. This can be partially compensated by a high patience and/or a large valuation of the collective immunity. The calibrated version of our model, based on an original survey carried out on a representative sample of the adult population living in France allowing us to identify curvatures of their value function, their discount rates and their willingness to cooperate, can predict the evolution of the vaccination intentions between November 2020 an March 2021. We also show that the international differences in the vaccination intentions are closely related to the valuation of the vaccination as a common good. |
| Keywords: | behavioral economics,Covid-19,prospect theory,vaccination choice |
| Date: | 2021–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03381425&r= |
| By: | Marco Scholtz (Thomas More Kempen (BELGIUM) - Thomas More Kempen (BELGIUM)); Kaat de Ridder (Thomas More Kempen (BELGIUM) - Thomas More Kempen (BELGIUM)) |
| Abstract: | Purpose: To determine the influence of COVID-19 and the first 2020 lockdown on Flemish people's initial travel behaviour perceptions, a hypothetical scenario was posed to respondents where they were asked to keep in mind a situation where they might be able to travel again during the summer of 2020 (July/August). This research had two main aims: i) the pre-lockdown travel plans for summer 2020 were determined; ii) the extent to which respondents would adapt their travel behaviour if they were hypothetically allowed to travel again by summer 2020. Methods: This exploratory research was done by means of an online quantitative questionnaire of which 1803(n) complete responses were obtained through convenience and snowball sampling. Results: The results revealed that respondents did have initial travel plans for the 2020 summer (July/August) period, but that they adjusted their planning to mostly travelling nationally/locally, potentially benefitting the local tourism industry. These findings (i) indicate the importance of directing marketing efforts towards the local travel market and (ii) contribute to literature regarding the resilience of the (local) tourism industry. Additionally, the research unveils how the industry should do long-term planning by taking the immediate travel behaviour changes of the Flemish travel consumers into account through regular intervals of consumer research so that it can pick up on possible behavioural trends and ready itself. Implications: Government, together with the industry, can work towards policies that act as a safety net during possible future industry disasters to minimize the negative impacts and foster a swift recovery. |
| Keywords: | Coronavirus,epidemic,lockdown,travel behaviour,tourism |
| Date: | 2021–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03373987&r= |
| By: | Johanna Mollerstrom; Avner Strulov-Shlain; Dmitry Taubinsky |
| Abstract: | We report the results of an online experiment studying preferences for giving and preferences for group-wide redistribution in small (4-person) and large (200-person) groups. We find that the desire to engage in voluntary giving decreases significantly with group size. However, voting for group-wide redistribution is precisely estimated to not depend on group size. Moreover, people’s perception of the size of their reference group is malleable, and affects their desire to give. These results suggest that government programs, such as progressive tax-and-transfer systems, can help satisfy other-regarding preferences for redistribution in a way that creating opportunities for voluntary giving cannot. |
| JEL: | D63 D9 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29375&r= |