Nonparametric vs parametric binary choice models: An empirical investigation
AbstractThe estimation of conditional probability distribution functions (PDFs) in a kernel nonparametric framework has recently received attention. As emphasized by Hall, Racine and Li (2004), these conditional PDFs are extremely useful for a range of tasks including modelling and predicting consumer choice. The aim of this paper is threefold. First, we implement nonparametric kernel estimation of PDF with a binary choice variable and both continuous and discrete explanatory variables. Second, we address the issue of the performances of this nonparametric estimator when compared to a classic on-the-shelf parametric estimator, namely a probit. We propose to evaluate these estimators in terms of their predictive performances, in the line of the recent "revealed performance" test proposed by Racine and Parmeter (2009). Third, we provide a detailed discussion of the results focusing on environmental insights provided by the two estimators, revealing some patterns that can only be detected using the nonparametric estimator.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49286.
Date of creation: May 2009
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Binary choice models; Nonparametric estimation; specification test; tap water demand; Research Methods/ Statistical Methods;
Other versions of this item:
- Bontemps, Christophe & Racine, Jeffrey S. & Simioni, Michel, 2011. "Nonparametric vs parametric binary choice models: An empirical investigation," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116005, European Association of Agricultural Economists.
- Bontemps, Christophe & Racine, Jeffrey S. & Simioni, Michel, 2009. "Nonparametric vs Parametric Binary Choice Models: An Empirical Investigation," TSE Working Papers 09-126, Toulouse School of Economics (TSE).
- NEP-ALL-2009-05-16 (All new papers)
- NEP-DCM-2009-05-16 (Discrete Choice Models)
- NEP-ECM-2009-05-16 (Econometrics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Li, Qi & Racine, Jeff, 2003. "Nonparametric estimation of distributions with categorical and continuous data," Journal of Multivariate Analysis, Elsevier, vol. 86(2), pages 266-292, August.
- Tristen Hayfield & Jeffrey S. Racine, . "Nonparametric Econometrics: The np Package," Journal of Statistical Software, American Statistical Association, vol. 27(i05).
- BONTEMPS Christophe & NAUGES CÃ©line, 2006. "Carafe ou bouteille ? Le rÃ´le de la qualitÃ© de l'environnement dans la dÃ©cision du consommateur," LERNA Working Papers 06.07.200, LERNA, University of Toulouse.
- Briesch R.A. & Chintagunta P.K. & Matzkin R.L., 2002. "Semiparametric Estimation of Brand Choice Behavior," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 973-982, December.
- Qi Li & Jeffrey Scott Racine, 2006. "Nonparametric Econometrics: Theory and Practice," Economics Books, Princeton University Press, edition 1, volume 1, number 8355.
- Peter Hall & Jeff Racine & Qi Li, 2004. "Cross-Validation and the Estimation of Conditional Probability Densities," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 1015-1026, December.
- Jeffrey S. Racine & Christopher F. Parmeter, 2012. "Data-Driven Model Evaluation: A Test for Revealed Performance," Department of Economics Working Papers 2012-13, McMaster University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.