Zero-inflated ordered probit (ZIOP) and middle-inflated ordered probit (MIOP) models are finding increasing favour in the discrete choice literature. Both models consist of a mixture of binary and single ordered probit equations, the combination of which accounts for an "excessive" build-up of observations in a given choice category. We propose generalisations to these models - which collapse to their ZIOP/MIOP counterparts under a set of simple parameter restrictions - with respect to the inflation process. The appropriateness and implications of our generalisations are demonstrated by using two key empirical applications from the economics and political science literatures. Likelihood ratio (LR) and Lagrange multiplier (LM) specification tests lead us to support the newly proposed generalised models over the ZIOP/MIOP ones, and suggest a role for our generalisations in modelling zero- and middle-inflation processes.
{"title":"Estimation, Specification and Testing in Middle- and Zero-Inflated Ordered Probit Models","authors":"Sarah Brown, M. Harris, Christopher Spencer","doi":"10.2139/ssrn.3119673","DOIUrl":"https://doi.org/10.2139/ssrn.3119673","url":null,"abstract":"Zero-inflated ordered probit (ZIOP) and middle-inflated ordered probit (MIOP) models are finding increasing favour in the discrete choice literature. Both models consist of a mixture of binary and single ordered probit equations, the combination of which accounts for an \"excessive\" build-up of observations in a given choice category. We propose generalisations to these models - which collapse to their ZIOP/MIOP counterparts under a set of simple parameter restrictions - with respect to the inflation process. The appropriateness and implications of our generalisations are demonstrated by using two key empirical applications from the economics and political science literatures. Likelihood ratio (LR) and Lagrange multiplier (LM) specification tests lead us to support the newly proposed generalised models over the ZIOP/MIOP ones, and suggest a role for our generalisations in modelling zero- and middle-inflation processes.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129565145","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper introduces a new two-parameter lifetime distribution, called the exponential-generalized truncated geometric (EGTG) distribution, by compounding the exponential with the generalized truncated geometric distributions. The new distribution involves two important known distributions, i.e., the exponential-geometric (Adamidis and Loukas, 1998) and the extended (complementary) exponential-geometric distributions (Adamidis et al., 2005; Louzada et al., 2011) in the minimum and maximum lifetime cases, respectively. General forms of the probability distribution, the survival and the failure rate functions as well as their properties are presented for some special cases. The application study is illustrated based on two real data sets.
通过将指数与广义截尾几何分布复配，引入了一种新的双参数寿命分布，即指数-广义截尾几何分布。新的分布涉及两个重要的已知分布，即指数几何分布(Adamidis and Loukas, 1998)和扩展(互补)指数几何分布(Adamidis et al.， 2005;Louzada et al.， 2011)，分别在最短和最长寿命的情况下。针对一些特殊情况，给出了概率分布、生存函数和故障率函数的一般形式及其性质。并以两个实际数据集为例进行了应用研究。
{"title":"The Exponential-Generalized Truncated Geometric (EGTG) Distribution: A New Lifetime Distribution","authors":"Mohieddine Rahmouni, Ayman Orabi","doi":"10.5539/IJSP.V7N1P1","DOIUrl":"https://doi.org/10.5539/IJSP.V7N1P1","url":null,"abstract":"This paper introduces a new two-parameter lifetime distribution, called the exponential-generalized truncated geometric (EGTG) distribution, by compounding the exponential with the generalized truncated geometric distributions. The new distribution involves two important known distributions, i.e., the exponential-geometric (Adamidis and Loukas, 1998) and the extended (complementary) exponential-geometric distributions (Adamidis et al., 2005; Louzada et al., 2011) in the minimum and maximum lifetime cases, respectively. General forms of the probability distribution, the survival and the failure rate functions as well as their properties are presented for some special cases. The application study is illustrated based on two real data sets.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133346905","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
D. Landriault, Bin Li, Sooie-Hoe Loke, G. Willmot, Di Xu
Conditions for the convexity of compound geometric tails and compound geometric convolution tails are established. The results are then applied to analyze the convexity of the ruin probability and the Laplace transform of the time to ruin in the classical compound Poisson risk model with and without diffusion. An application to an optimization problem is given.
{"title":"A Note on the Convexity of Ruin Probabilities","authors":"D. Landriault, Bin Li, Sooie-Hoe Loke, G. Willmot, Di Xu","doi":"10.2139/ssrn.2921389","DOIUrl":"https://doi.org/10.2139/ssrn.2921389","url":null,"abstract":"Conditions for the convexity of compound geometric tails and compound geometric convolution tails are established. The results are then applied to analyze the convexity of the ruin probability and the Laplace transform of the time to ruin in the classical compound Poisson risk model with and without diffusion. An application to an optimization problem is given.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128571848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-12-22DOI: 10.18045/ZBEFRI.2016.2.505
Zhenhua Wang, Guangsheng Zhang
This study aims at analyzing the difference in the level of economic development between China’s counties from the two perspectives of industrial policy and production efficiency. Based on panel data of 1830 Chinese counties, this study employs the new classical economic growth theory framework to analyze the counties’ economic growth by the perpetual inventory method, Malmquist index, among others. The results show that the economy of the counties exhibits δ convergence since 2004, and the absolute differences in the different counties are expanding. Industrial policy ensures the additional deepening of the level of capital in the county. Additionally, a substantial difference was observed between the agricultural sector and the non-agricultural sector, whereby the total factor productivity and the technical efficiency are on the rise, resulting in the phenomenon of dual paths of technological progress. In summary, the capital deepening difference between the sectors, production efficiency, and dual paths of technological progress owing to the counties’ industrial policy are the basic reasons for the regional differences in the level of economic development in China.
{"title":"Industrial Policy, Production Efficiency Improvement and the Chinese County Economic Growth","authors":"Zhenhua Wang, Guangsheng Zhang","doi":"10.18045/ZBEFRI.2016.2.505","DOIUrl":"https://doi.org/10.18045/ZBEFRI.2016.2.505","url":null,"abstract":"This study aims at analyzing the difference in the level of economic development between China’s counties from the two perspectives of industrial policy and production efficiency. Based on panel data of 1830 Chinese counties, this study employs the new classical economic growth theory framework to analyze the counties’ economic growth by the perpetual inventory method, Malmquist index, among others. The results show that the economy of the counties exhibits δ convergence since 2004, and the absolute differences in the different counties are expanding. Industrial policy ensures the additional deepening of the level of capital in the county. Additionally, a substantial difference was observed between the agricultural sector and the non-agricultural sector, whereby the total factor productivity and the technical efficiency are on the rise, resulting in the phenomenon of dual paths of technological progress. In summary, the capital deepening difference between the sectors, production efficiency, and dual paths of technological progress owing to the counties’ industrial policy are the basic reasons for the regional differences in the level of economic development in China.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126515801","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter provides an introduction to choice models based on the principle of direct utility maximization. Models of direct utility are characterized by specifications of the utility function and accompanying budget constraint that allows separation of what is gained (i.e., utility) from that which is given up in an exchange. Direct utility maximization rationalizes observed choice as arising from goal-oriented consumers who are resource constrained. Marketing data overwhelmingly reflects goal-oriented behavior on the part of consumers in the high rate of zero’s present in disaggregate data, indicating that most people choose to not purchase most products that are available. By developing alternative models of direct utility maximization, we hope to spur additional research on utility formation and a more in-depth understanding of optimal firm reaction to the demands and constraints of consumers.
{"title":"Economic Models of Choice","authors":"Greg M. Allenby, Jaehwan Kim, Peter E. Rossi","doi":"10.2139/ssrn.2650572","DOIUrl":"https://doi.org/10.2139/ssrn.2650572","url":null,"abstract":"This chapter provides an introduction to choice models based on the principle of direct utility maximization. Models of direct utility are characterized by specifications of the utility function and accompanying budget constraint that allows separation of what is gained (i.e., utility) from that which is given up in an exchange. Direct utility maximization rationalizes observed choice as arising from goal-oriented consumers who are resource constrained. Marketing data overwhelmingly reflects goal-oriented behavior on the part of consumers in the high rate of zero’s present in disaggregate data, indicating that most people choose to not purchase most products that are available. By developing alternative models of direct utility maximization, we hope to spur additional research on utility formation and a more in-depth understanding of optimal firm reaction to the demands and constraints of consumers.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130543515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Looking at a large number of markets, I find that (i) prices and variety are higher when there are two competing supermarkets than in those with a single store and (ii) the two effects are positively correlated. This pattern persists after controlling for differences across markets in a variety of ways.I present a model that explains these patterns. Stores choose prices and the number of products to carry and consumers decide which store to go to and what to buy. In the model: 1) Incentives to increase variety are higher for duopoly supermarkets because of the business stealing effect; 2) As more products become available, the potential surplus for each consumer increases, which allows stores to raise prices and still induce a purchase. These two forces combined result in equilibrium predictions consistent with the patterns in the data.In order to answer whether consumers are better-off in duopoly, when prices and variety are higher, I estimate consumer preferences. I find that consumer welfare is higher under competition. However, that is a result from the wider choice of products rather than lower prices.
{"title":"Price and Variety in Supermarkets: Can Store Competition Hurt Consumers?","authors":"A. Trindade","doi":"10.2139/ssrn.1878830","DOIUrl":"https://doi.org/10.2139/ssrn.1878830","url":null,"abstract":"Looking at a large number of markets, I find that (i) prices and variety are higher when there are two competing supermarkets than in those with a single store and (ii) the two effects are positively correlated. This pattern persists after controlling for differences across markets in a variety of ways.I present a model that explains these patterns. Stores choose prices and the number of products to carry and consumers decide which store to go to and what to buy. In the model: 1) Incentives to increase variety are higher for duopoly supermarkets because of the business stealing effect; 2) As more products become available, the potential surplus for each consumer increases, which allows stores to raise prices and still induce a purchase. These two forces combined result in equilibrium predictions consistent with the patterns in the data.In order to answer whether consumers are better-off in duopoly, when prices and variety are higher, I estimate consumer preferences. I find that consumer welfare is higher under competition. However, that is a result from the wider choice of products rather than lower prices.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131982560","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Assortment optimization is an important problem that arises in many practical applications such as retailing and online advertising. In such settings, the goal is to select a subset of items to offer from a universe of substitutable items in order to maximize expected revenue when consumers exhibit a random substitution behavior. We consider a capacity constrained assortment optimization problem under the Markov Chain based choice model, recently considered by Blanchet et al. (2013). In this model, the substitution behavior of customers is modeled through transitions in a Markov chain. Capacity constraints arise naturally in many applications to model real-life constraints such as shelf space or budget limitations. We show that the capacity constrained problem is APX-hard even for the special case when all items have unit weights and uniform prices, i.e., it is NP-hard to obtain an approximation ratio better than some given constant. We present constant factor approximations for both the cardinality and capacity constrained assortment optimization problem for the general Markov chain model. Our algorithm is based on a "local-ratio" paradigm that allows us to transform a non-linear revenue function into a linear function. The local-ratio based algorithmic paradigm also provides interesting insights towards the optimal stopping problem as well as other assortment optimization problems.
{"title":"Capacity Constrained Assortment Optimization Under the Markov Chain Based Choice Model","authors":"Antoine Désir, Vineet Goyal, D. Segev, Chun Ye","doi":"10.2139/ssrn.2626484","DOIUrl":"https://doi.org/10.2139/ssrn.2626484","url":null,"abstract":"Assortment optimization is an important problem that arises in many practical applications such as retailing and online advertising. In such settings, the goal is to select a subset of items to offer from a universe of substitutable items in order to maximize expected revenue when consumers exhibit a random substitution behavior. We consider a capacity constrained assortment optimization problem under the Markov Chain based choice model, recently considered by Blanchet et al. (2013). In this model, the substitution behavior of customers is modeled through transitions in a Markov chain. Capacity constraints arise naturally in many applications to model real-life constraints such as shelf space or budget limitations. We show that the capacity constrained problem is APX-hard even for the special case when all items have unit weights and uniform prices, i.e., it is NP-hard to obtain an approximation ratio better than some given constant. We present constant factor approximations for both the cardinality and capacity constrained assortment optimization problem for the general Markov chain model. Our algorithm is based on a \"local-ratio\" paradigm that allows us to transform a non-linear revenue function into a linear function. The local-ratio based algorithmic paradigm also provides interesting insights towards the optimal stopping problem as well as other assortment optimization problems.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"94 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122111293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is significant variation in the percentage of adults registered as organ donors across the United States. Some of this variation may be due to characteristics of the sign-up process, in particular the form that is used when state residents renew or apply for their driver's licenses. However, it is difficult to model and predict the success of the different forms with typical methods, due to the exceptionally large feature space and the limited data. To surmount this problem, I apply a methodology that uses data on subjective non-choice reactions to predict choices. I find that active (ie yes-no) framing of the designation question decreases designation rates by 2-3 percentage points relative to an opt-in framing. Additionally, I show that this methodology can predict behavior in an experimental setting involving social motives where we have good structural benchmarks. More generally, this methodology can be used to perform policy pseudo-experiments where field experiments would prove prohibitively expensive or difficult.
{"title":"The Lives of Others: Predicting Donations with Non-Choice Responses","authors":"Jeffrey Naecker","doi":"10.2139/ssrn.2699551","DOIUrl":"https://doi.org/10.2139/ssrn.2699551","url":null,"abstract":"There is significant variation in the percentage of adults registered as organ donors across the United States. Some of this variation may be due to characteristics of the sign-up process, in particular the form that is used when state residents renew or apply for their driver's licenses. However, it is difficult to model and predict the success of the different forms with typical methods, due to the exceptionally large feature space and the limited data. To surmount this problem, I apply a methodology that uses data on subjective non-choice reactions to predict choices. I find that active (ie yes-no) framing of the designation question decreases designation rates by 2-3 percentage points relative to an opt-in framing. Additionally, I show that this methodology can predict behavior in an experimental setting involving social motives where we have good structural benchmarks. More generally, this methodology can be used to perform policy pseudo-experiments where field experiments would prove prohibitively expensive or difficult.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132265632","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The selection of products and prices offered by a firm significantly impacts its profits. Existing approaches do not provide flexible models that capture the joint effect of assortment and price. We propose a nonparametric framework in which each customer is represented by a particular price threshold and a particular preference list over the alternatives. The customers follow a two-stage choice process; they consider the set of products with prices less than the threshold and choose the most preferred product from the set considered. We develop a tractable nonparametric expectation maximization (EM) algorithm to fit the model to the aggregate transaction data and design an efficient algorithm to determine the profit-maximizing combination of offer set and price. We also identify classes of pricing structures of increasing complexity, which determine the computational complexity of the estimation and decision problems. Our pricing structures are naturally expressed as business constraints, allowing a mana...
{"title":"A Nonparametric Joint Assortment and Price Choice Model","authors":"Srikanth Jagabathula, Paat Rusmevichientong","doi":"10.2139/ssrn.2286923","DOIUrl":"https://doi.org/10.2139/ssrn.2286923","url":null,"abstract":"The selection of products and prices offered by a firm significantly impacts its profits. Existing approaches do not provide flexible models that capture the joint effect of assortment and price. We propose a nonparametric framework in which each customer is represented by a particular price threshold and a particular preference list over the alternatives. The customers follow a two-stage choice process; they consider the set of products with prices less than the threshold and choose the most preferred product from the set considered. We develop a tractable nonparametric expectation maximization (EM) algorithm to fit the model to the aggregate transaction data and design an efficient algorithm to determine the profit-maximizing combination of offer set and price. We also identify classes of pricing structures of increasing complexity, which determine the computational complexity of the estimation and decision problems. Our pricing structures are naturally expressed as business constraints, allowing a mana...","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-03-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125738439","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
To what degree developing countries gain from signing double tax treaties is being hotly debated. In this paper, we analyze the Austrian tax treaty policy. Combining legal and economic perspectives, we find that developing countries are likely to expect both positive and negative impacts from signing a double tax treaty (DTT) with Austria. On the one hand, the results of our econometric analysis suggest that middle-income countries that sign a DTT with Austria may expect an increased number of foreign direct investment projects from Austrian companies. On the other hand, the signatory states may suffer from limited withholding taxation rights established in the DTTs for the source country, which could lead to reduced tax revenues in the developing countries.
{"title":"A Legal and Economic Analysis of Austria's Double Tax Treaty Network with Developing Countries","authors":"J. Braun, Daniel Fuentes","doi":"10.2139/ssrn.2516308","DOIUrl":"https://doi.org/10.2139/ssrn.2516308","url":null,"abstract":"To what degree developing countries gain from signing double tax treaties is being hotly debated. In this paper, we analyze the Austrian tax treaty policy. Combining legal and economic perspectives, we find that developing countries are likely to expect both positive and negative impacts from signing a double tax treaty (DTT) with Austria. On the one hand, the results of our econometric analysis suggest that middle-income countries that sign a DTT with Austria may expect an increased number of foreign direct investment projects from Austrian companies. On the other hand, the signatory states may suffer from limited withholding taxation rights established in the DTTs for the source country, which could lead to reduced tax revenues in the developing countries.","PeriodicalId":165362,"journal":{"name":"ERN: Discrete Regression & Qualitative Choice Models (Single) (Topic)","volume":"91 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126779231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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