Transition choice probabilities and welfare analysis in random utility models
We study the descriptive and the normative consequences of attribute changes in standard discrete choice models. For additive random utility models, we derive expressions for the transition choice probabilities for a change in the systematic utility. We then use these expressions to compute the CDF’s of the compensating variation conditional on the initial and on the final choices. The conditional moments of the compensating variation are obtained as a one-dimensional integral of the transition choice probabilities. We also provide a stochastic version of Shephard’s Lemma when transitions are observed. Example of the logit and the disaggregated CES are also studied.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 33 1 34 25 60 63
Fax: 33 1 34 25 62 33
Web page: http://thema.u-cergy.fr
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ema:worpap:2007-19. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marion Oury)The email address of this maintainer does not seem to be valid anymore. Please ask Marion Oury to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.