Arriving at a decision: A semi-parametric approach to institutional birth choice in India

The Multinomial Logit (MNL) model is popular, but a semi-parametric specification of its link/utility function has seldom been used in empirical applications. This is primarily because of the resource intensive nature of semi-parametric estimation. In this paper we propose and implement a parallel computation algorithm to estimate the semi-parametric kernel MNL model. This algorithm reduces model estimation time by a factor of 2–10, depending on the size of the dataset and the available resources for computation. These computational gains make the estimation of this model feasible for large datasets. Additionally, using a Monte Carlo study we show that the kernel MNL outperforms the traditional linear MNL model in terms of fit and predicted choice probabilities. We demonstrate how kernel-based specification can unearth important heterogeneities in the effect of covariates through an empirical exercise. We use data from a nationally representative household survey (N = 157,804) to analyze the factors associated with institutional births (as opposed to home births) in India. Our revealed-preference results indicate that maternal education, household assets, distance to formal health facility, and birth order play an essential role in determining birth location choice. Although the directions of impact are similar across both the linear and the kernel MNL specifications, there are significant differences in the marginal effects of different factors across the two models. These differences, which arise due to the flexibility afforded by the semi-parametric specification, potentially bring additional nuance to policy discussions.