Advances in random utility models report of the workshop on advances in random utility models duke invitational symposium on choice modeling behavior

In recent years, major advances have taken place in three areas of random utility modeling: (1) semiparametric estimation, (2) computational methods for multinomial probit models, and (3) computational methods for Bayesian estimation. This paper summarizes these developments and discusses their implications for practice.     

Water pricing and water allocation in israel

Marginal valuation of water is complicated because water authorities in most countries do not equate prices across users. Standard analyses imply that unequal valuation of water by users is inefficient and that economic efficiency can be improved by equating prices after accounting for transportation costs. Such inefficiencies are usually explained by the influence of political interest groups. We suggest alternatively that motivations such as food self-sufficiency, ideological settlement objectives, equity, and long run considerations may take precedence over short-run economic efficiency in Israeli water markets. If so, new peace accords, water projects, and water price equalization appear to have important complementary effects when exploited in combination.     

Semiparametric estimation of a censored regression model with an unknown transformation of the dependent variable

This paper presents a method for estimating the model Λ(Y)=min(β′X+U, C), where Y is a scalar, Λ is an unknown increasing function, X is a vector of explanatory variables, β is a vector of unknown parameters, U has unknown cumulative distribution function F, and C is a censoring threshold. It is not assumed that Λ and F belong to known parametric families; they are estimated nonparametrically. This model includes many widely used models as special cases, including the proportional hazards model with unobserved heterogeneity. The paper develops n^1/2-consistent, asymptotically normal estimators of Λ and F. Estimators of β that are n^1/2-consistent and asymptotically normal already exist. The results of Monte Carlo experiments illustrate the finite-sample behavior of the estimators.     

Testing a parametric quantile-regression model with an endogenous explanatory variable against a nonparametric alternative

This paper is concerned with inference about a function g that is identified by a conditional quantile restriction involving instrumental variables. The paper presents a test of the hypothesis that g belongs to a finite-dimensional parametric family against a nonparametric alternative. The test is not subject to the ill-posed inverse problem of nonparametric instrumental variable estimation. Under mild conditions, the test is consistent against any alternative model. In large samples, its power is arbitrarily close to 1 uniformly over a class of alternatives whose distance from the null hypothesis is proportional to n^−1/2, where n is the sample size. Monte Carlo simulations illustrate the finite-sample performance of the test.     

Genetic adverse selection: Evidence from long-term care insurance and Huntington disease

Individual, personalized genetic information is increasingly available, leading to the possibility of greater adverse selection over time, particularly in individual-payer insurance markets. We use data on individuals at risk for Huntington disease (HD), a degenerative neurological disorder with significant effects on morbidity, to estimate adverse selection in long-term care insurance. We find strong evidence of adverse selection: individuals who carry the HD genetic mutation are up to 5 times as likely as the general population to own long-term care insurance. This finding is supported both by comparing individuals at risk for HD to those in the general population and by comparing across tested individuals in the HD-risk population with and without the HD mutation.     

Fetal protection: Law,ethics and corporate policy

Corporate fetal protection policies are designed to protect unborn children from exposure to harmful substances in the workplace. In recent years, a number of corporations have instituted fetal protection policies which excluded all fertile female employees from jobs which exposed them to hazardous substances. Critics argued that these policies discriminated against women, and several lawsuits were filed.The United States Supreme Court recently decided a case involving the fetal protection policy of Johnson Controls, Inc. This article will analyze the impact of the Supreme Court decision from a legal and ethical perspective. Practical guidelines for policies which protect the unborn and comply with the law will also be addressed.Ira Sprotzer, J. D., is an Associate Professor and Chairman of the Department of Business Policy and Environment at Rider College, Lawrenceville, N.J. Professor Sprotzer is a member of the New Jersey Bar and publishes research in the field of Employment Law.Ilene V. Goldberg, J. D., is an Assistant Professor in the Department of Business Policy and Environment at Rider College, Lawrenceville, N.J. Professor Goldberg is a member of the New Jersey and Pennsylvania Bars and publishes research on topics related to Health Law.     

Macroeconomic Determinants of Multifamily Housing Starts: A Descriptive Analysis

The multifamily component of residential construction has received relatively little attention in the existing literature on macro-economic housing markets. In those studies where single and multifamily starts have been treated separately [ Kawaller (1976) , Arcelus and Meltzer (1973) , Brady (1973) , Kalchbrenner (1972) Smith (1969) , the greater share of attention and background discussion has been directed toward the singlefamily sector. Such treatment probably is due to the fact that multifamily starts have traditionally accounted for the smaller fraction of total private starts. Since the Census Bureau began recording the starts breakdown in 1959, however, this fraction has not fallen much below a fifth in any quarter, and it has been as high as 48 percent. Moreover, with a growing acceptance of the condominium and cooperative housing concepts, expanding Federal rental assistance initiatives, and changing life style preferences, it would appear that increased attention given to the multifamily sector, may significantly enhance our understanding of housing markets in general.