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on Discrete Choice Models |
| By: | Ruben Loaiza-Maya; Didier Nibbering; Dan Zhu |
| Abstract: | The exact estimation of latent variable models with big data is known to be challenging. The latents have to be integrated out numerically, and the dimension of the latent variables increases with the sample size. This paper develops a novel approximate Bayesian method based on the Langevin diffusion process. The method employs the Fisher identity to integrate out the latent variables, which makes it accurate and computationally feasible when applied to big data. In contrast to other approximate estimation methods, it does not require the choice of a parametric distribution for the unknowns, which often leads to inaccuracies. In an empirical discrete choice example with a million observations, the proposed method accurately estimates the posterior choice probabilities using only 2% of the computation time of exact MCMC. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.14445&r=dcm |
| By: | Ali Hortacsu (University of Chicago and NBER); Olivia R. Natan (University of California, Berkeley); Hayden Parsley (University of Texas, Austin); Timothy Schwieg (University of Chicago, Booth); Kevin R. Williams (Cowles Foundation, Yale University) |
| Abstract: | We propose a demand estimation method that allows for a large number of zero sale observations, rich unobserved heterogeneity, and endogenous prices. We do so by modeling small market sizes through Poisson arrivals. Each of these arriving consumers solves a standard discrete choice problem. We present a Bayesian IV estimation approach that addresses sampling error in product shares and scales well to rich data environments. The data requirements are traditional market-level data as well as a measure of market sizes or consumer arrivals. After presenting simulation studies, we demonstrate the method in an empirical application of air travel demand. |
| Keywords: | Discrete Choice Modeling, Demand Estimation, Zero-Sale Observations, Bayesian Methods, Airline Markets. |
| JEL: | C11 C18 L93 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2313r2&r=dcm |
| By: | Le Gloux, Fanny; Ropars-Collet, Carole; Issanchou, Alice; Dupraz, Pierre |
| Abstract: | Designing incentives for agri-environmental public good provision with threshold effects calls for payment mechanisms favouring critical mass participation and continuity of commitments at the landscape scale. Studies show farmers are reluctant to collective requirements but favourable to a bonus rewarding collective action. We conducted a choice experiment to test the acceptability of a bonus in a hypothetical scheme for improving rivers’ water quality in France. We introduce a sponsorship bonus each time the farmer convinces a peer into entering the scheme that can be combined with a collective result bonus per hectare if the river reaches a higher step of the water quality scale. We consider the involvement of local financers could increase the willingness to pay beyond opportunity costs and income foregone, and propose higher levels of payment than agri-environmental schemes. Results suggests a sponsorship bonus on its own is cost-effective, and that preferences for the bonus levels are heterogeneous.. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy |
| Date: | 2023–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:inrasl:337160&r=dcm |
| By: | Cropper, Maureen L. (Resources for the Future); Joiner, Emily (Resources for the Future); Krupnick, Alan (Resources for the Future) |
| Abstract: | The US Environmental Protection Agency (EPA) bases its estimate of the value of statistical life (VSL) on 17 hedonic wage studies and five contingent valuation studies conducted between 1974 and 1991. We summarize advances in the mortality risk valuation literature since these papers were published, focusing on studies that value risks to adults and were conducted in the United States. We review hedonic wage, other revealed preference, and stated preference studies, identifying papers that satisfy appropriate validity criteria. We conclude that the recent literature is sufficiently rich to permit a revision of EPA’s baseline estimate. Importantly, VSL estimates from both the averting behavior and stated preference studies we review reflect the preferences of a wider range of demographic groups than the current VSL, and newer studies better target causes of death relevant to EPA regulations. |
| Date: | 2023–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-23-30&r=dcm |
| By: | Pablo Schenone |
| Abstract: | The weak axiom of revealed preference (WARP) ensures that the revealed preference (i) is a preference relation (i.e., it is complete and transitive) and (ii) rationalizes the choices. However, when WARP fails, either one of these two properties is violated, but it is unclear which one it is. We provide an alternative characterization of WARP by showing that WARP is equivalent to the conjunction of two axioms each of which separately guarantees (i) and (ii). |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.11923&r=dcm |
| By: | Ivan Tzintzun (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Jonathan Sicsic (LIRAES (URP_ 4470) - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UPCité - Université Paris Cité); Lise Rochaix (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UP1 - Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | In a context of increasingly limited resources, a number of strategies, such as the adoption of decrementally cost-effective interventions (d-CEIs), which are both less clinically effective and less costly, could offer potential levers at enhancing both efficiency and equity in healthcare systems. These interventions are located in the SouthWest (S-W) quadrant of the cost-effectiveness plane, and have yet received little attention from researchers or HTA agencies as they are often perceived as per se "unethical" or "unacceptable", hence the reference sometimes made to the S-W quadrant as the 'Far West'. The purpose of our paper is to investigate policy-makers' willingness to adopt d-CEIs using a choice experiment. We use a two-stage pairwise DCE survey to elicit (i) preferences for d-CEIs' attributes in forced choices and (ii) adoption preferences, i.e. the determinants of d-CEIs' adoption (unforced choices). We investigate the effect (and trade-offs) between three attributes: health loss (very small to significant), reversibility defined as the possibility to switch back to usual care (from possible to hardly possible) and cost-savings (from 5% to 15% of a fixed budget). Such trade-offs are contextualized by using two sensitivity attributes: disease severity (low and moderate) and savings uncertainty (low and high). Our final sample consists of 180 respondents with 46.7% originating from France and the remaining respondents from other EU countries. All attributes' levels have a significant effect in the two decision stages. The "health loss" attribute dominates in the first stage followed by "reversibility": we calculate that decision-makers would require 28.3% increase of budget savings to be indifferent between a scenario of small versus significant health losses and 14.5% budget savings to be indifferent between a scenario of possible and hardly possible reversibility. In contrast, the "reversibility" attribute dominates in the second stage suggesting that anticipated regret may play a role in adoption decisions. |
| Keywords: | health policy-makers choices, Discrete Choice Experiment, Decrementally Cost-Effective Interventions, Disinvestment |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-04154933&r=dcm |
| By: | Alex Proshin (Canadian Center for Health Economics, Hospinomics - PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Alexandre Cazenave-Lacroutz (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Lise Rochaix (Hospinomics - PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Studying quasi-experimental data from French hospitals from 2010 to 2013, we test the effects of a substantial diagnosis-related group (DRG) tariff refinement that occurred in 2012, designed to reduce financial risks of French maternity wards. To estimate the resulting DRG incentives with regard to the choice between scheduled C-sections and other modes of child delivery, we predict, based on pre-admission patient characteristics, the probability of each possible child delivery outcome and calculate expected differences in associated tariffs. Using patient-level administrative data, we find that introducing additional severity levels and clinical factors into the reimbursement algorithm had no significant effect on the probability of a scheduled C-section being performed. The results are robust to multiple formulations of DRG financial incentives. Our paper is the first study that focuses on the consequences of a DRG refinement in obstetrics and develops a probabilistic approach suitable for measuring the expected effects of DRG fee incentives in the presence of multiple tariff groups. |
| Keywords: | C-section, Delivery, Diagnosis-related groups, Financial incentives, Midwives, Obstetricians, Refinement, Vaginal labor |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:hal-04157204&r=dcm |
| By: | Luca Henkel |
| Abstract: | Observed individual behavior in the presence of ambiguity shows insufficient responsiveness to changes in subjective likelihoods. Despite being integral to theoretical models and relevant in many domains, evidence on the causes and determining factors of such likelihood insensitive behavior is scarce. This paper investigates the role of beliefs in the form of ambiguity perception – the extent to which a decision-maker has difficulties assigning a single probability to each possible event – as a potential determinant. Using an experiment, I elicit measures of ambiguity perception and likelihood insensitivity and exogenously vary the level of perceived ambiguity. The results provide strong support for a perception-based explanation of likelihood insensitivity. The two measures are highly correlated at the individual level, and exogenously increasing ambiguity perception increases insensitivity, suggesting a causal relationship. In contrast, ambiguity perception is unrelated to ambiguity aversion – the extent to which a decision-maker dislikes the presence of ambiguity. |
| Keywords: | Ambiguity, decision-making under uncertainty, likelihood insensitivity, multiple prior models |
| JEL: | D81 D83 D91 C91 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_440&r=dcm |
| By: | Michael Bates (University of California-Riverside); Seolah Kim (Albion College) |
| Abstract: | We propose a per-cluster instrumental-variables approach (PCIV) for estimating correlated random coefficient models in the presence of contemporaneous endogeneity and two-way fixed effects. We use variation across clusters to estimate coefficients with homogeneous slopes (such as time effects) and within-cluster variation to estimate the cluster-specific heterogeneity directly. We then aggregate them to population averages. We demonstrate consistency, showing robustness over standard estimators, and provide analytic standard errors for robust inference. Basic implementation is straightforward using standard software such as Stata. In Monte Carlo simulation, PCIV performs relatively well against pooled 2SLS and fixed-effects IV (FEIV) with a finite number of clusters or finite observations per cluster. We apply PCIV in estimating the price elasticity of gasoline demand using state fuel taxes as instrumental variables. PCIV estimation allows for greater transparency of the underlying data. In our setting, we provide evidence of correlation between heterogeneity in the first and second stages, violating a key assumption underpinning consistency of standard estimators. We see significant divergence in the implicit weighting when applying FEIV from the natural weights applied in PCIV. Overlooking effect heterogeneity with standard estimators is consequential. Our estimated distribution of elasticities reveals significant heterogeneity and meaningful differences in estimated averages. |
| Date: | 2023–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:boc:dsug23:04&r=dcm |
| By: | Kirill S. Evdokimov; Ilze Kalnina; Andrei Zeleneev |
| Abstract: | When evaluating partial effects, it is important to distinguish between structural endogeneity and measurement errors. In contrast to linear models, these two sources of endogeneity affect partial effects differently in nonlinear models. We study this issue focusing on the Instrumental Variable (IV) Probit and Tobit models. We show that even when a valid IV is available, failing to differentiate between the two types of endogeneity can lead to either under- or over-estimation of the partial effects. We develop simple estimators of the bounds on the partial effects and provide easy to implement confidence intervals that correctly account for both types of endogeneity. We illustrate the methods in a Monte Carlo simulation and an empirical application. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.14862&r=dcm |
| By: | Marek Jenöffy-Lochau (Büro am Carlsplatz) |
| Abstract: | The concept of 'preferences' is a cornerstone of economic theory. However, the question whether or how preferences accrue has not been discussed in economic literature so much. Kirchgässner suggested that this happens during a 'phase of socialisation' of an individual. Discussing the topic 'preferences, ' leads to several contradictions and unanswered questions. I show a path how to address the topic and present a first step towards an economic 'theory of persuasive rhetoric' that Galperti recently requested. |
| Keywords: | Preferences, Preference Formation, Information, Communication, Persuasion, Economic Methodology |
| Date: | 2023–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04139498&r=dcm |
| By: | Monika Garai-Fodor (Obuda University Keleti Karoly Faculty of Business and Management); Katalin Jäckel (Budapest Business School) |
| Abstract: | In the present study, we analyzed the preference system for job choice under the influence of the coronavirus from a generation-specific perspective.Employer branding, retention and motivation of employees is an increasing challenge for employers. Changing labour market conditions, the generational divide and the specific values of the new generation have in themselves posed significant challenges for employers. This has been exacerbated by the multidimensional negative macro-effects of the coronavirus, which have significantly reshaped labour market conditions. Working conditions and attitudes to work have been transformed by the pandemic, as has the issue and meaning of loyalty. In addition to the difficulties of recruitment and retention, the difficulties of cooperation between different generations have presented HR professionals with new challenges.It is very difficult to create a climate of trust that can be both optimal, attractive and stimulating for employees with different values and socialisation backgrounds. It is no coincidence that in recent decades a growing body of research has examined how how the ranking of incentives for employees has changed. Given that, the HR profession has witnessed an increasing intensity of change.Within the framework of this study, quantitative data were collected in the framework of primary research using a pre-tested standardised questionnaire. The analysis of the responses obtained from the random sampling allowed us to conclude that the generational gap in perceptions of the world of work has been further exacerbated by the pandemic, which has further encouraged employers to think about differentiated solutions and employer branding strategies rather than generic solutions. |
| Keywords: | generations, workplace preference, quantitative research |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:13315658&r=dcm |
| By: | Yiren Wang (Singapore Management University); Peter C. B. Phillips (Cowles Foundation, Yale University); Liangjun Su (Tsinghua University) |
| Abstract: | This paper considers a linear panel model with interactive fixed effects and unobserved individual and time heterogeneities that are captured by some latent group structures and an unknown structural break, respectively. To enhance realism the model may have different numbers of groups and/or different group memberships before and after the break. With the preliminary nuclear norm-regularized estimation followed by row- and column-wise linear regressions, we estimate the break point based on the idea of binary segmentation and the latent group structures together with the number of groups before and after the break by sequential testing K-means algorithm simultaneously. It is shown that the break point, the number of groups and the group memberships can each be estimated correctly with probability approaching one. Asymptotic distributions of the estimators of the slope coefficients are established. Monte Carlo simulations demonstrate excellent finite sample performance for the proposed estimation algorithm. An empirical application to real house price data across 377 Metropolitan Statistical Areas in the US from 1975 to 2014 suggests the presence both of structural breaks and of changes in group membership. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2364&r=dcm |
| By: | Marek Jenöffy (Büro am Carlsplatz) |
| Abstract: | In 2019, Galberti called for the formulation of a theory of "how decision makers change worldviews." He was looking for a "theory of persuasive rhetoric" that goes "beyond Bayesianism." In this field, there is insight of ancient rhetoric, and empirical results of modern communications research. I discuss these results and extract possible variables for a theory of persuasive rhetoric. I model a decision as a seesaw. Seesaws follow the principle of the lever. The model explains why the assumption of constant preferences in economic models often makes sense. |
| Keywords: | Preferences, Formation, Information |
| Date: | 2023–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04136550&r=dcm |
| By: | Wu, Karin |
| Keywords: | Marketing, Agricultural Finance, Food Consumption/Nutrition/Food Safety |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335852&r=dcm |