Social scientists rarely take full advantage of the information available in their statistical results. As a consequence, they miss opportunities to present quantities that are of greatest substantive interest for their research and express the appropriate degree of certainty about these quantities. In this article, we offer an approach, built on the technique of statistical simulation, to extract the currently overlooked information from any statistical method and to interpret and present it in a reader-friendly manner. Using this technique requires some expertise,

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This paper reviews methods for the estimation of dynamic discrete choice structural models and discusses related econometric issues. We consider single agent models, competitive equilibrium models and dynamic games. The methods are illustrated with descriptions of empirical studies which have applied these techniques to problems in different areas of economics. Programming codes for the estimation methods are available in a companion web page.

Firms that practice second-degree price discrimination may intentionally distort product characteristics away from their efficient levels (e.g., the small version of a product is “too small.”) This paper offers the first empirical study of this product design issue. Using data from a specialty coffee market, I estimate a structural utility model that allows for consumer screening under vertical preference heterogeneity. Comparisons of cost data and the estimated benefits from changing product characteristics suggest that some of the central predictions of nonlinear pricing theory are realized in the observed market. Product design distortions are relatively large for drinks that are not the most pro…table but over which the firms hold market power. The estimated distortions decrease toward zero for the products with the highest price-cost margins; this result provides empirical support for the “no distortion at the top” prediction from theory.

In the vehicle routing problem with time windows a number of identical vehicles must be routed to and from a depot to cover a given set of customers, each of whom has a specified time interval indicating when they are available for service. Each customer also has a known demand, and a vehicle may only serve the customers on a route if the total demand does not exceed the capacity of the vehicle. The most effective solution method proposed to date for this problem is due to Kohl, Desrosiers, Madsen, Solomon, and Soumis. Their algorithm uses a cutting-plane approach followed by a branchand -bound search with column generation, where the columns of the LP relaxation represent routes of individual vehicles. We describe a new implementation of their method, using Karger's randomized minimum-cut algorithm to generate cutting planes. The standard benchmark in this area is a set of 87 problem instances generated in 1984 by M. Solomon; making using of parallel processing in both the cutting-pla...

Abstract: Estimating a demand system under the assumption that preferences are homogeneous may lead to biased estimates of parameters for any specific individual and significantly different expected consumer surplus estimates. This paper investigates several different parametric methods to incorporate heterogeneity in the context of a repeated discrete-choice model. The first is the classic method of assuming utility to be a function of individual characteristics. Second, a random parameters method is proposed, where preference parameters have some known distribution. Random parameters logit causes the random components to be correlated across choice occasions and, in a sense, eliminates IIA. Simulation noise is discussed. Finally, methods are proposed to relax the assumption that the unobserved stochastic component of utility is identically distributed across individuals. For example, randomization of the logit scale, which is a new method, allows noise levels to vary across individuals, without the added burden of explaining the source using covariates. The application is to Atlantic salmon fishing, and expected compensating variations and changes in trip patterns are compared across the models for three policy-relevant changes in fishing conditions at the Penobscot River, the best salmon fishing site in Maine.

This paper estimates a simultaneous model of moderate and heavy drinking, smoking, and wages using a random sample of employed Canadian men. With all else in the system held constant, abstention from drinking and heavy drinking are associated with, respectively, large and small wage penalties relative to moderate drinking. Smoking is associated with a large wage penalty. If wages are excluded from the substance use equations, drinking abstention and heavy drinking are associated with large and almost identical wage penalties relative to moderate drinking, and the penalty to smoking is diminished. JEL Classification: I12 Keywords: alcohol, tobacco, simultaneous equations, maximum simulated likelihood 1 I thank Cam Donaldson, Herb Emery, David Feeny, Mingshan Lu, Ken McKenzie, and Whipple Smith for helpful discussions. Address correspondence to Chris Auld, Department of Economics, University of Calgary, 2500 University Dr NW, Calgary, Alberta T2N 1N4. Phone: (403)220-4098. Fax: (403)28...

This research was supported by core funding to ISER from the UK Economic and Social Research Council and the University of Essex. The first draft of this article was written when Jenkins visited the SOEP Group at DIW Berlin. Mark Stewart provided many helpful comments and suggestions. The code for Halton draws is a generalization of some do file code by Arne Uhlendorff (DIW Berlin) which, in turn, uses a program posted on Statalist by Nick Cox (Durham University) in August 2004: see

This paper uses Þeld evidence and a structural consumption-savings model to estimate discount functions. Evidence on wealth accumulation implies that people act patiently when considering long-term decisions, while data on credit card borrowing and consumption-income comovement suggests impatient behavior in the short term. Using the Method of Simulated Moments we estimate an institutionally rich model that features stochastic labor income, liquidity constraints, child and adult dependents, liquid and illiquid assets, revolving credit, retirement, and quasi-hyperbolic discount functions. We Þnd benchmark estimates of 40 % for the shortterm discount rate and 4.3 % for the long-term discount rate. Most speciÞcations reject the null hypothesis of time-consistent exponential discounting. Exact quantitative results depend on assumptions about the return on illiquid assets and the coefficient of relative risk aversion.

We study the effects of market structure on entry using data from the UK fast food (counter-service burger) industry over the years 1991-1995, for which the market can be characterized as a duopoly. We use both reduced form estimations and a structural model, controlling for market-specific time-invariant unobservables. For both firms, we find that market structure matters greatly- rival presence increases the probability of entry. Variable profits per customer are increasing in the number of own outlets, and decreasing in the number of rival outlets. Our results strongly suggest the presence of product differentiation, firm learning and market power.