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Home > Business and Economics > Economics > Microeconomics > Modelling Individual Choice: Econometrics of Corners, Kinks and Holes
Modelling Individual Choice: Econometrics of Corners, Kinks and Holes

Modelling Individual Choice: Econometrics of Corners, Kinks and Holes


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About the Book

Most microeconomic texts stress the neo-classical model of smooth optimising behaviour in an environment of constant prices. Most econometric texts stress regression - based on methods implying continuous variation in economic quantities. If one attempts to estimate a model of rational behaviour from data on individuals it is soon apparent that neither of these views is generally tenable. This book discusses the econometric methodology appropriate to the modelling of individual choices (concentrating particularly on demend and labour supply), using survey data. It is especially concerned with problems of econometric specification raised by discreteness in the variable to be modelled. The book begins with preparatory chapters surveying the theory of rational choice and the statistical characteristics of cross-section data. Later chapters examine: models of choice between discrete alternatives; models based on corner solutions and other mechanisms generating zero demands; choice in the presence of kinked and discontinuous budget constraints; sequential choice duration analysis; ratioing and other obstructions to free choice, and finally the aggregative implications of these models.

Table of Contents:
The Econometrics of Individual Behaviour; Part 1 The Theory of Rational Choice: Choice Sets, Preferences and Utility Functions; The Opportunity Set; Direct Utility and the Interior Optimum; Indirect Utility and Roy's Identity; The Cost Function and Shephard's Lemma; The Distance Function; Variation in Preferences.Part 2 Survey Methods and Cross-Section Econometrics: Sampling Techniques; The Survey enquiry; An Example - the UK Family Expenditure Survey; Estimation Under Exogenous Sampling; Estimation Under Endogenous Sampling; Non-Response and Extraneous Sample Selection. Part 3 Choice Among Discrete Alternatives: Applications of Discrete Choice Models; Estimation and Testing; Random Parameter Models; Alternative-Specific Random Errors; Tversky's Elimination Model; Hierarchical and Sequential Discrete Choice; Composite Discrete-Continuous Choice. Part 4 Zero Expenditures and Corner Solutions: Single Equation Censored Regression (Tobit) Models; Systems of Censored Regression equations; Corner Solutions; Consumption and Purchases - the P-Tobit Model; Partially-Observed Explanatory Variables. Part 5 Kinked and Discontinuous Budget Frontiers; Some Examples; Models with Deterministic Preferences; Models with Random Preferences; More on Stochastic Specification. Part 6 Sequential Choice in Continuous Time - Duration Models; The Hazard Function; Applications of Duration Models; Extensions; Parametric Estimation; Semi-Parametric Methods. Part 7 Barriers to Choice: Point Rationing; Bounds on Behaviour; Discrete Opportunities. Appendices: logistic, extreme value and generalised value distributions; truncated and censored distributions; the computation of probability integrals.


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Product Details
  • ISBN-13: 9780631145899
  • Publisher: John Wiley and Sons Ltd
  • Publisher Imprint: Blackwell Publishers
  • Height: 229 mm
  • Width: 152 mm
  • ISBN-10: 0631145893
  • Publisher Date: 20 Jul 1989
  • Binding: Hardback
  • Sub Title: Econometrics of Corners, Kinks and Holes


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