scholarly journals Discrete Choice under Risk with Limited Consideration

2021 ◽  
Vol 111 (6) ◽  
pp. 1972-2006
Author(s):  
Levon Barseghyan ◽  
Francesca Molinari ◽  
Matthew Thirkettle
Keyword(s):  
Discrete Choice ◽  
Choice Model ◽  
Unobserved Heterogeneity ◽  
Sufficient Conditions ◽  
Decision Makers ◽  
Consideration Sets ◽  
Property Insurance ◽  
Finite Set ◽  
Using Data ◽  
Standard Risk

This paper is concerned with learning decision-makers’ preferences using data on observed choices from a finite set of risky alternatives. We propose a discrete choice model with unobserved heterogeneity in consideration sets and in standard risk aversion. We obtain sufficient conditions for the model’s semi-nonparametric point identification, including in cases where consideration depends on preferences and on some of the exogenous variables. Our method yields an estimator that is easy to compute and is applicable in markets with large choice sets. We illustrate its properties using a dataset on property insurance purchases. (JEL D81, D83, D91, G22, G52)

scholarly journals The Effect of Unconditional Cash Transfers on Adult Labour Supply: A Unitary Discrete Choice Model for the Case of Ecuador

2015 ◽  
Vol 10 (2) ◽  
Author(s):  
Andrés Mideros ◽  
Cathal O’Donoghue
Keyword(s):  
Discrete Choice ◽  
Labour Supply ◽  
Choice Model ◽  
Discrete Choice Model ◽  
Cash Transfers ◽  
Negative Income ◽  
Social Transfers ◽  
Supply Model ◽  
Using Data ◽  
Unconditional Cash Transfers

AbstractWe examine the effect of unconditional cash transfers by a unitary discrete labour supply model. We argue that there is no negative income effect of social transfers in the case of poor adults because leisure could not be assumed to be a normal good under such conditions. Using data from the national employment survey of Ecuador (ENEMDUR) we estimate the effect of the

scholarly journals Beliefs and preferences for food-safety policies: a discrete choice model under uncertainty

2018 ◽  
Vol 46 (5) ◽  
pp. 769-799
Author(s):  
Simone Cerroni ◽  
Sandra Notaro ◽  
Roberta Raffaelli
Keyword(s):  
Food Safety ◽  
Discrete Choice ◽  
Utility Theory ◽  
Choice Model ◽  
Scientific Information ◽  
Expected Utility Theory ◽  
Error Component ◽  
Bad News ◽  
New Information ◽  
Using Data

Abstract Outcomes of food policies are highly uncertain. Therefore, the public’s support for these policies depends on individuals’ beliefs and the provision of scientific information. Using data collected from a discrete choice experiment survey, we explore whether new information regarding a food-safety policy influences respondents’ support, while controlling for risk and time preferences. Additionally, we examine if support depends on whether information is perceived as either good or bad news. Results from the estimation of parametric error component logit models, based on expected utility theory and rank dependent utility theory, suggest that good and bad news affects preferences and welfare measures.

Unobserved Heterogeneity in Dynamic Discrete Choice Models

1993 ◽  
Vol 25 (4) ◽  
pp. 495-519 ◽  
Author(s):  
S Reader
Keyword(s):  
Discrete Choice ◽  
Simulation Analysis ◽  
Choice Model ◽  
Unobserved Heterogeneity ◽  
Random Effect ◽  
Estimation Procedure ◽  
Choice Models ◽  
Discrete Choice Models ◽  
Dynamic Discrete Choice ◽  
Cross Sectional

Monte Carlo simulation methods are used to confirm the identifiability of discrete choice models in which unobserved heterogeneity is specified as a random effect and modelled using the nonparametric mass-points approach. This simulation analysis is also used to examine alternative strategies for the estimation of such models by using a quasi-Newton maximum-likelihood estimation procedure, given the apparent sensitivity of model identification to choice of starting values. A mass-point model approach is then applied to a dataset of repeated choice involving household shopping trips between three types of retail centre, and the results from this approach are compared with those obtained from a conventional cross-sectional multinomial logit choice model as well as to results from a model in which a parametric distribution (the Dirichlet) is used to model the unobserved heterogeneity.

scholarly journals A Note on the Petroleum Industry's Participation in Conservation Agreements for the Lesser Prairie Chicken

2018 ◽  
Vol 48 (1) ◽  
pp. 100-116 ◽  
Author(s):  
Richard T. Melstrom
Keyword(s):  
Economic Development ◽  
Discrete Choice ◽  
Choice Model ◽  
Endangered Species Act ◽  
Habitat Conservation ◽  
Willingness To Participate ◽  
Gas Wells ◽  
Prairie Chicken ◽  
Oil And Natural Gas ◽  
Using Data

This paper examines the petroleum industry's willingness to participate in conservation agreements for the lesser prairie chicken, a candidate for listing under the Endangered Species Act (ESA). Voluntary conservation agreements with assurances (VCAAs) can incentivize habitat conservation and sustain economic development. Using data on oil and natural gas wells in Kansas and Oklahoma, I develop a discrete choice model to examine company preferences for locating wells and participating in VCAAs for the lesser prairie chicken. Participation in VCAAs is low, but I find participating wells are concentrated in areas with the most crucial habitat.

Lexis

2017 ◽  
Author(s):  
Patrick Hanks
Keyword(s):  
Word Meaning ◽  
Sufficient Conditions ◽  
Raw Material ◽  
Word Use ◽  
Selectional Restrictions ◽  
Harmonic Progression ◽  
Generative Lexicon ◽  
Finite Set ◽  
Using Data ◽  
Necessary And Sufficient

The lexicon constitutes the basic raw material of natural language. The article starts by clarifying the various meanings of the term ‘word’: tokens, types, lemmas, phrasemes, and lexical entries. It goes on to ask whether names are words. Next, it asks whether the lexicon of a language is a finite set. Word frequencies in text can now be computed and compared, using data from large corpora. The distribution of words in any text or collection of texts conforms approximately to Zipf’s prediction of a harmonic progression down the frequency ranks from a few exceptionally frequent words to a large number of very rare words. The article goes on to summarize the main European theories of word use and word meaning, including semasiological approaches (Wikins and Roget), necessary and sufficient conditions for definition (Leibniz), prototype theory (Rosch), stereotype theory (Putnam), preference semantics (Wilks), selectional restrictions (Chomsky), generative lexicon theory (Pustejovsky), lexical functional grammar (Bresnan and Kaplan), frame semantics (Fillmore), and the contrast between the ‘idiom principle’ and the ‘open-choice principle’ (Sinclair). The article also discusses the views of modern lexicographers such as Sinclair, Kilgarriff, Atkins, and Hanks, who reject the notion that words have meaning, typically in favour of the idea that phraseology is equally important (if not more so) for understanding meaning.

Mixed Logit Models for Multiparty Elections

2001 ◽  
Vol 9 (2) ◽  
pp. 116-136 ◽  
Author(s):  
Garrett Glasgow
Keyword(s):  
Discrete Choice ◽  
Voting Behavior ◽  
Choice Model ◽  
Mixed Logit ◽  
Discrete Choice Model ◽  
Random Coefficients ◽  
Flexible Tool ◽  
Mixed Logit Models ◽  
Using Data ◽  
General Specification

Mixed logit (MXL) is a general discrete choice model thus far unexamined in the study of multicandidate and multiparty elections. Mixed logit assumes that the unobserved portions of utility are a mixture of an IID extreme value term and another multivariate distribution selected by the researcher. This general specification allows MXL to avoid imposing the independence of irrelevant alternatives (IIA) property on the choice probabilities. Further, MXL is a flexible tool for examining heterogeneity in voter behavior through random-coefficients specifications. MXL is a more general discrete choice model than multinomial probit (MNP) in several respects, and can be applied to a wider variety of questions about voting behavior than MNP. An empirical example using data from the 1987 British General Election demonstrates the utility of MXL in the study of multicandidate and multiparty elections.

Discrete Choice with Social and Spatial Network Interdependencies

2005 ◽  
Vol 1921 (1) ◽  
pp. 70-78 ◽  
Author(s):  
Elenna R. Dugundji ◽  
Joan L. Walker
Keyword(s):  
Discrete Choice ◽  
Choice Model ◽  
Mode Choice ◽  
Decision Makers ◽  
Spatial Network ◽  
Individual Choice ◽  
Traditional Methods ◽  
Data Set ◽  
Industry Standard ◽  
Formidable Challenge

Discrete choice analysis has become an industry standard in land use and transportation models. Such models are fundamentally grounded in individual choice; therefore, the treatment of interdependencies among decision makers is a formidable challenge. Through an empirical application to mode choice, the capture of interdependencies in discrete choice is described and illustrated. Decision makers are assumed to be influenced, for example, by people of similar socioeconomic status who are nearby. Given such social and spatial network relationships, the choice model captures interdependencies in two ways: ( a) including in the systematic utility variables that describe choices of others in the decision maker's social and spatial network and ( b) allowing for correlation across the disturbances of decision makers within the same social and spatial network. Variations of these approaches (including their combination and the use of random parameters) are tested with mode choice and compared with traditional methods of market segmentation. The application results indicate that the proposed methods for capturing interdependencies are significant and superior to traditional methods. Furthermore, capturing the interdependencies in the systematic utility is sufficient: it is better than the model with just correlation and is not significantly worse than the model with both the systematic term and correlation. The systematic term also captures a feedback effect that can propel the adoption of a new mode over time, for example. Models are estimated with the use of a traditional transportation data set and readily available software.

Firms' Strategic Leverage of Unplanned Exposure and Planned Advertising: An Analysis in the Context of Celebrity Endorsements

2018 ◽  
Vol 55 (1) ◽  
pp. 14-34 ◽  
Author(s):  
Timothy P. Derdenger ◽  
Hui Li ◽  
Kannan Srinivasan
Keyword(s):  
Discrete Choice ◽  
Choice Model ◽  
Early Stage ◽  
Media Exposure ◽  
New Product ◽  
Celebrity Endorsements ◽  
Consumer Awareness ◽  
New Product Introductions ◽  
Using Data ◽  
Celebrity Endorsers

Using data on advertising and sales of an innovative piece of golf equipment and the performance of its celebrity endorsers, the authors build a discrete-choice model that incorporates consumer awareness and preferences. They empirically investigate how celebrity endorsements affect consumer choices during new product introductions, the roles of planned advertising and unplanned media exposure, and how firms can strategically leverage the unplanned component. Model estimates reveal that wins in professional golf tournaments (which proxy for unplanned television exposure during weekly golf tournaments) affect awareness and that paid planned advertising impacts awareness and preferences. Focusing on Titleist equipment, counterfactual analysis demonstrates that the unplanned media exposure and planned advertising account for 22% and 24% of sales, respectively. The results also suggest that firms would benefit from coordinating the two. The planned portion should serve as a substitute for unplanned media exposure in the early stage and a complement as products age.

Theoretical, methodological and practical issues of choice models

2018 ◽  
Vol 1 (1) ◽  
pp. 21-37
Author(s):  
Bharat P. Bhatta
Keyword(s):  
Discrete Choice ◽  
Model Building ◽  
Estimation Method ◽  
Choice Models ◽  
Discrete Choice Models ◽  
Decision Makers ◽  
Model Formulation ◽  
Random Utility Maximization ◽  
The Relationship ◽  
Method Model

This paper analyzes and synthesizes the fundamentals of discrete choice models. This paper alsodiscusses the basic concept and theory underlying the econometrics of discrete choice, specific choicemodels, estimation method, model building and tests, and applications of discrete choice models. Thiswork highlights the relationship between economic theory and discrete choice models: how economictheory contributes to choice modeling and vice versa. Keywords: Discrete choice models; Random utility maximization; Decision makers; Utility function;Model formulation

Migration and the Internet

2017 ◽  
Vol 14 (3) ◽  
pp. 331-342 ◽  
Author(s):  
Thomas John Cooke ◽  
Ian Shuttleworth
Keyword(s):  
United States ◽  
Information And Communication Technologies ◽  
Unobserved Heterogeneity ◽  
Panel Study ◽  
The United States ◽  
Negative Effect ◽  
Information And Communication ◽  
Using Data ◽  
And Migration ◽  
Dynamics Models

It is widely presumed that information and communication technologies, or ICTs, enable migration in several ways; primarily by reducing the costs of migration. However, a reconsideration of the relationship between ICTs and migration suggests that ICTs may just as well hinder migration; primarily by reducing the costs of not moving.  Using data from the US Panel Study of Income Dynamics, models that control for sources of observed and unobserved heterogeneity indicate a strong negative effect of ICT use on inter-state migration within the United States. These results help to explain the long-term decline in internal migration within the United States.

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