Estimation of a dynamic discrete choice model of irreversible investment

In this paper we propose and estimate a dynamic structural model of fixed capital investment at the firm level. Our dataset consists of an unbalanced panel of Spanish manufacturing firms. Two important features are present in this dataset. There are periods in which firms decide not to invest and periods of large investment episodes. These empirical evidence of infrequent and lumpy investment provides evidence in favour of irreversibilities and nonconvex capital adjustment costs. We consider a dynamic discrete choice model of irreversible investment with a general specification of adjustment costs including convex and nonconvex components. We use a two stage estimation procedure. In a first stage, we obtain GMM estimates of technological parameters. In the second stage, we obtain partial maximum likelihood estimates for the adjustment cost parameters. The estimation strategy builds on the representation of conditional value functions as a computable function of conditional choice probabilities. It is in the line of structural estimation techniques which avoid the solution of the dynamic programming problem

Impacts of the Boom-Bust Cycle on the Effectiveness of Policies for Moderating the Consequences of Sprawl on Residential Development

urban sprawl, spatial discrete-choice model, Land Economics/Use,

A Discrete Choice Model for Web Site Work Results

Currently a corporate web site is not considered as a necessary business attribute, but as a marketing tool which should yield results. In this study we consider a web site as an instrument for attraction of new partners (customers, suppliers). Web site outputs are a number of visitors interested in contact information (reached the contact info page) and a number of visitors who sent a request via a special form on the web site. We build a sequential discrete choice model for web site outputs. Explanatory variables set includes a number of visited pages, seconds spent on the web site, and dummy variables for specific pages visited (a page with prices information, a portfolio page). Also we investigate an influence of search engines (Google, Yahoo, MSN), which refer a visitor to a corporate web site and keywords used for pay-per-click advertising campaigns. We estimate model parameters on the base of a small UK-based web development company's web site statistical data and discover strong dependencies, which allow improving web site organisation and its search engine positioning.sequential discrete choice model; corporate web site

The Identification and Economic Content of Ordered Choice Models with Stochastic Thresholds

This paper extends the widely used ordered choice model by introducing stochastic thresholds and interval-specific outcomes. The model can be interpreted as a generalization of the GAFT (MPH) framework for discrete duration data that jointly models durations and outcomes associated with different stopping times. We establish conditions for nonparametric identification. We interpret the ordered choice model as a special case of a general discrete choice model and as a special case of a dynamic discrete choice model.

Patterns of consumption in a discrete choice model with asymmetric interactions

We study the consumption behaviour of an asymmetric network of heterogeneous agents in the framework of discrete choice models with stochastic decision rules. We assume that the interactions among agents are uniquely specified by their ``social distance'' and consumption is driven by peering, distinction and aspiration effects. The utility of each agent is positively or negatively affected by the choices of other agents and consumption is driven by peering, imitation and distinction effects. The dynamical properties of the model are explored, by numerical simulations, using three different evolution algorithms with: parallel, sequential and random-sequential updating rules. We analyze the long-time behaviour of the system which, given the asymmetric nature of the interactions, can either converge into a fixed point or a periodic attractor. We discuss the role of symmetric versus asymmetric contributions to the utility function and also that of idiosyncratic preferences, costs and memory in the consumption decision of the agents.Comment: 11 pages, 9 figures, presented at "Complex Behaviour in Economics" Aix-en-Provence 3-7 May, 2000. Minor modifications made: references added and typos corrected. This paper is a fully revised version to the one previously submitted as cond-mat/990913

ESTIMATION OF A DYNAMIC DISCRETE CHOICE MODEL OF IRREVERSIBLE INVESTMENT

In this paper we propose and estimate a dynamic structural model of fixed capital investment at the firm level. Our dataset consists of an unbalanced panel of Spanish manufacturing firms. Two important features are present in this dataset. There are periods in which firms decide not to invest and periods of large investment episodes. These empirical evidence of infrequent and lumpy investment provides evidence in favour of irreversibilities and nonconvex capital adjustment costs. We consider a dynamic discrete choice model of irreversible investment with a general specification of adjustment costs including convex and nonconvex components. We use a two stage estimation procedure. In a first stage, we obtain GMM estimates of technological parameters. In the second stage, we obtain partial maximum likelihood estimates for the adjustment cost parameters. The estimation strategy builds on the representation of conditional value functions as a computable function of conditional choice probabilities. It is in the line of structural estimation techniques which avoid the solution of the dynamic programming problem.

A Theoretical Foundation for Count Data Models

The paper develops a theoretical foundation for using count data models in travel cost analysis. Two micro models are developed: a restricted choice model and a repeated discrete choice model. We show that both models lead to identical welfare measures.