This paper provides two main contributions to binary choice models with endogenous regressors. First, we propose some variants of special regressor based estimators that are numerically trivial to implement. These estimators provide consistent estimates of binary choice model coef cients when regressors (either discretely or continuously distributed) are endogenous, and when the latent errors h...

This study examines the factors that determine the likelihood of submitting a potentially fraudulent prevented planting claim. A theoretical model is developed and the theoretical predictions are empirically verified by utilizing a binary choice model and crop insurance data from the southern United States. The empirical results show that insured producers with higher prevented planting coverag...

We consider a discrete choice model in which the payoffs to each of an agent’s n actions are subjected to the average of m i.i.d. shocks, and use tools from large deviations theory to characterize the rate of decay of the probability of choosing a given suboptimal action as m approaches infinity. Our model includes the multinomial probit model of Myatt and Wallace (2003) as a special case. We s...

We provide a simple necessary and suffi cient condition for when a multiproduct demand system can be generated from a discrete choice model with unit demands.

Many economic decisions involve a binary choice for example, workers choosing between education and labor force participation, consumers determining whether to buy a good, firms selecting whether to enter a market or whether to adopt a new technology. In such settings, agents’ choices often depend on imperfect expectations of the future payoffs from their decision (expectational error) as well ...

This paper simultaneously measures the rate of time preference and the coefficient of risk aversion, as well as investigates the interdependencies of four addictive behaviours: smoking, drinking, pachinko (a popular Japanese form of pinball gambling), and horse betting among a sample of the Japanese population. We reach two main conclusions. First, there are significant interdependencies among ...

Despite growing interest in urban consumption amenities, little is known about their origin and importance. This paper estimates the consumption value of urban density by combining travel microdata with Google’s local business data. This dataset allows to integrate travel costs into a discrete choice model for restaurants. I find that in high density areas, consumers enjoy large benefits from v...

We link a stochastic binary choice model of individual decisions to participate in the marine sport fisheries in Cook Inlet, Alaska, with a simulation-based sample enumeration procedure for aggregating estimates of individual angler welfare and a regionally adjusted zip code-level input-output model of regional economic activity. The result is a behaviorally based model for predicting changes i...

Empirically, teenagers who use alcohol or marijuana in one period are more likely to use hard drugs in the future. This pattern can be explained by a causal effect of soft drug consumption on future consumption of hard drugs (i.e., state dependence between drugs or stepping-stone effects) or by unobserved characteristics that make people more likely to use both soft and hard drugs (i.e., correl...

In this paper we introduce the fare planning problem for public transport which consists in designing a system of fares maximizing revenue. We propose a new simple general model for this problem. It is based on a demand function and constraints for the different fares. The constraints define the structure of the fare system, e.g., distance dependent fares or zone fares. We discuss a simple exam...