IDEAS home Printed from https://ideas.repec.org/p/irs/cepswp/2021-01.html
   My bibliography  Save this paper

New York, Abu Dhabi, London or Stay at Home? Using a Cross-Nested Logit Model to Identify Complex Substitution Patterns in Migration

Author

Listed:
  • Michel Beine
  • Michel Bierlaire
  • Frédéric Docquier

Abstract

The question of how people revise their decisions about whether to emigrate, and where to, when facing changes in the global environment is of critical importance in migration literature. We propose a cross-nested logit (CNL) approach to generalize the way deviations from the IIA (independence from irrelevant alternatives)) hypothesis can be tested and exploited in migration studies. Compared with the widely used logit model, the structure of a CNL model allows for more sophisticated substitution patterns between destinations. To illustrate the relevance of our approach, we provide a case study using migration aspiration data from India. We demonstrate that the CNL approach outperforms standard competing approaches in terms of quality of fit, has stronger predictive power, implies stronger heterogeneity in responses to shocks, and highlights complex and intuitive substitution patterns between all possible alternatives. In particular, we shed light on the low degree of substitutability between the home and foreign alternatives as well as on the subgroups of countries that are considered by potential Indian movers as highly or poorly substitutable.

Suggested Citation

  • Michel Beine & Michel Bierlaire & Frédéric Docquier, 2021. "New York, Abu Dhabi, London or Stay at Home? Using a Cross-Nested Logit Model to Identify Complex Substitution Patterns in Migration," LISER Working Paper Series 2021-01, Luxembourg Institute of Socio-Economic Research (LISER).
  • Handle: RePEc:irs:cepswp:2021-01
    as

    Download full text from publisher

    File URL: https://liser.elsevierpure.com/fr/publications/new-york-abu-dhabi-london-or-stay-at-home-using-a-cross-nested-lo
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Isabelle Chort & Jean-Noël Senne, 2018. "You’ll Be a Migrant, My Son: Accounting for Migrant Selection within the Household," Economic Development and Cultural Change, University of Chicago Press, vol. 66(2), pages 217-263.
    2. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2013. "Multilateral resistance to migration," Journal of Development Economics, Elsevier, vol. 102(C), pages 79-100.
    3. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    4. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    5. Johannes Buggle & Thierry Mayer & Seyhun Orcan Sakalli & Mathias Thoenig, 2023. "The Refugee’s Dilemma: Evidence from Jewish Migration out of Nazi Germany," The Quarterly Journal of Economics, Oxford University Press, vol. 138(2), pages 1273-1345.
    6. Timothy J. Hatton, 2016. "Refugees, Asylum Seekers, and Policy in OECD Countries," American Economic Review, American Economic Association, vol. 106(5), pages 441-445, May.
    7. Frédéric Docquier & Joël Machado & Khalid Sekkat, 2015. "Efficiency Gains from Liberalizing Labor Mobility," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 303-346, April.
    8. Christian Dustmann & Kristine Vasiljeva & Anna Piil Damm, 2019. "Refugee Migration and Electoral Outcomes," Review of Economic Studies, Oxford University Press, vol. 86(5), pages 2035-2091.
    9. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2015. "The size of the cliff at the border," Regional Science and Urban Economics, Elsevier, vol. 51(C), pages 1-6.
    10. Michel Beine & Simone Bertoli & Jesús Fernández-Huertas Moraga, 2016. "A Practitioners’ Guide to Gravity Models of International Migration," The World Economy, Wiley Blackwell, vol. 39(4), pages 496-512, April.
    11. Michael A. Clemens & Mariapia Mendola, 2020. "Migration from Developing Countries: Selection, Income Elasticity, and Simpson’s Paradox," Working Papers 539, Center for Global Development.
    12. Andrew D. Foster & Mark R. Rosenzweig, 2002. "Household Division and Rural Economic Growth," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 839-869.
    13. Samuel Bazzi & Gordon Hanson & Sarah John & Bryan Roberts & John Whitley, 2021. "Deterring Illegal Entry: Migrant Sanctions and Recidivism in Border Apprehensions," American Economic Journal: Economic Policy, American Economic Association, vol. 13(3), pages 1-27, August.
    14. Manchin, Miriam & Orazbayev, Sultan, 2018. "Social networks and the intention to migrate," World Development, Elsevier, vol. 109(C), pages 360-374.
    15. Simone Bertoli & Ilse Ruyssen, 2018. "Networks and migrants’ intended destination," Journal of Economic Geography, Oxford University Press, vol. 18(4), pages 705-728.
    16. Dao, Thu Hien & Docquier, Frédéric & Parsons, Chris & Peri, Giovanni, 2018. "Migration and development: Dissecting the anatomy of the mobility transition," Journal of Development Economics, Elsevier, vol. 132(C), pages 88-101.
    17. Bertoli, Simone & Moraga, Jesús Fernández-Huertas & Guichard, Lucas, 2020. "Rational inattention and migration decisions," Journal of International Economics, Elsevier, vol. 126(C).
    18. Kaivan Munshi & Mark Rosenzweig, 2016. "Networks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap," American Economic Review, American Economic Association, vol. 106(1), pages 46-98, January.
    19. David De La Croix & Frédéric Docquier & Alice Fabre & Robert Stelter, 2019. "The Academic Market And The Rise Of Universities In Medieval And Early Modern Europe (1000-1800)," LIDAM Discussion Papers IRES 2019019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    20. Cattaneo, Cristina & Peri, Giovanni, 2016. "The migration response to increasing temperatures," Journal of Development Economics, Elsevier, vol. 122(C), pages 127-146.
    21. Bredtmann, Julia & Nowotny, Klaus & Otten, Sebastian, 2020. "Linguistic distance, networks and migrants’ regional location choice," Labour Economics, Elsevier, vol. 65(C).
    22. Frédéric Docquier & Hillel Rapoport, 2012. "Globalization, Brain Drain, and Development," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 681-730, September.
    23. Inklaar, Robert & de Jong, Harmen & Bolt, Jutta & van Zanden, Jan, 2018. "Rebasing 'Maddison': new income comparisons and the shape of long-run economic development," GGDC Research Memorandum GD-174, Groningen Growth and Development Centre, University of Groningen.
    24. Timothy J. Hatton, 2017. "Refugees and asylum seekers, the crisis in Europe and the future of policy," Economic Policy, CEPR;CES;MSH, vol. 32(91), pages 447-496.
    25. Clemens, Michael A. & Pritchett, Lant, 2019. "The new economic case for migration restrictions: An assessment," Journal of Development Economics, Elsevier, vol. 138(C), pages 153-164.
    26. Isabelle Chort & Jean-Noël Senne, 2015. "Selection into Migration within a Household Model: Evidence from Senegal," The World Bank Economic Review, World Bank Group, vol. 29(suppl_1), pages 247-256.
    27. Friebel, Guido & Manchin, Miriam & Mendola, Mariapia & Prarolo, Giovanni, 2018. "International Migration Intentions and Illegal Costs: Evidence from Africa-to-Europe Smuggling Routes," IZA Discussion Papers 11978, Institute of Labor Economics (IZA).
    28. Bertoli, Simone & Murard, Elie, 2020. "Migration and co-residence choices: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 142(C).
    29. David McKenzie & Hillel Rapoport, 2011. "Can migration reduce educational attainment? Evidence from Mexico," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1331-1358, October.
    30. Julia Bredtmann & Klaus Nowotny & Sebastian Otten, 2017. "Linguistic Distance, Networks and Migrants’ Regional Location Choice," RF Berlin - CReAM Discussion Paper Series 1712, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    31. Anna Mayda, 2010. "International migration: a panel data analysis of the determinants of bilateral flows," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(4), pages 1249-1274, September.
    32. Michel Bierlaire, 2006. "A theoretical analysis of the cross-nested logit model," Annals of Operations Research, Springer, vol. 144(1), pages 287-300, April.
    33. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, January.
    34. Stephen Drinkwater & Peter Ingram, 2009. "How Different are the British in their Willingness to Move? Evidence from International Social Survey Data," Regional Studies, Taylor & Francis Journals, vol. 43(2), pages 287-303.
    35. Frédéric Docquier & Giovanni Peri & Ilse Ruyssen, 2016. "The Cross-country Determinants of Potential and Actual Migration," World Scientific Book Chapters, in: The Economics of International Migration, chapter 12, pages 361-423, World Scientific Publishing Co. Pte. Ltd..
    36. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    37. Timothy J. Hatton, 2020. "Asylum Migration to the Developed World: Persecution, Incentives, and Policy," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 75-93, Winter.
    38. M. Hashem Pesaran, 2006. "Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure," Econometrica, Econometric Society, vol. 74(4), pages 967-1012, July.
    39. Ruyssen, Ilse & Salomone, Sara, 2018. "Female migration: A way out of discrimination?," Journal of Development Economics, Elsevier, vol. 130(C), pages 224-241.
    40. Michel Beine & Joël Machado & Ilse Ruyssen, 2020. "Do potential migrants internalize migrant rights in OECD host societies?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1429-1456, November.
    41. Clemens, Michael A. & Özden, Çağlar & Rapoport, Hillel, 2015. "Reprint of: Migration and Development Research is Moving Far Beyond Remittances," World Development, Elsevier, vol. 65(C), pages 1-5.
    42. Simone Bertoli & J. Fernandes-Huertas Moraga, 2013. "Multilateral resistance to migration," Post-Print halshs-00820169, HAL.
    43. Michel Beine, 2020. "Age, Desires and the Implicit Role of Out-Selection Factors of International Migration," DEM Discussion Paper Series 20-22, Department of Economics at the University of Luxembourg.
    44. Bertoli, Simone & Brücker, Herbert & Fernández-Huertas Moraga, Jesús, 2020. "Do Processing Times Affect the Distribution of Asylum Seekers across Europe?," IZA Discussion Papers 13018, Institute of Labor Economics (IZA).
    45. Michel Beine, 2020. "Age, Intentions and the Implicit Role of Out-Selection Factors of International Migration," CESifo Working Paper Series 8688, CESifo.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Batista, Catia & McKenzie, David, 2023. "Testing classic theories of migration in the lab," Journal of International Economics, Elsevier, vol. 145(C).
    2. Chiara Zanardello, 2023. "Market forces in Italian academia today (and yesterday)," Scientometrics, Springer;Akadémiai Kiadó, vol. 128(1), pages 651-698, January.
    3. Persyn, Damiaan, 2021. "Migrants looking for opportunities - On destination size and spatial aggregation in the gravity equation for migration," MPRA Paper 111064, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michel Beine & Joël Machado & Ilse Ruyssen, 2020. "Do potential migrants internalize migrant rights in OECD host societies?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1429-1456, November.
    2. Simone Bertoli & Frédéric Docquier & Hillel Rapoport & Ilse Ruyssen, 2022. "Weather shocks and migration intentions in Western Africa: insights from a multilevel analysis [Do climate variations explain bilateral migration? A gravity model analysis]," Journal of Economic Geography, Oxford University Press, vol. 22(2), pages 289-323.
    3. Marco Delogu & Frédéric Docquier & Joël Machado, 2018. "Globalizing labor and the world economy: the role of human capital," Journal of Economic Growth, Springer, vol. 23(2), pages 223-258, June.
    4. Els BEKEART & Ilse RUYSSEN & Sara SALOMONE, 2021. "Domestic and International Migration Intentions in Response to Environmental Stress: A Global Cross-country Analysis," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 87(3), pages 383-436, September.
    5. Simon Winter, 2020. "“It’s the Economy, Stupid!”: On the Relative Impact of Political and Economic Determinants on Migration," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 39(2), pages 207-252, April.
    6. Monica Langella & Alan Manning, 2021. "Income and the desire to migrate," CEP Discussion Papers dp1794, Centre for Economic Performance, LSE.
    7. Simone Bertoli & Ilse Ruyssen, 2018. "Networks and migrants’ intended destination," Journal of Economic Geography, Oxford University Press, vol. 18(4), pages 705-728.
    8. Zovanga L Kone & Maggie Y Liu & Aaditya Mattoo & Caglar Ozden & Siddharth Sharma, 2018. "Internal borders and migration in India," Journal of Economic Geography, Oxford University Press, vol. 18(4), pages 729-759.
    9. Albert MILLOGO & Ines TROJETTE & Nicolas PÉRIDY, 2021. "Are government policies efficient to regulate immigration? Evidence from France," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 53, pages 23-49.
    10. Narcisse Cha'Ngom & Christoph Deuster & Frédéric Docquier & Joël Machado, 2023. "Selective Migration and Economic Development: A Generalized Approach," LISER Working Paper Series 2023-06, Luxembourg Institute of Socio-Economic Research (LISER).
    11. Docquier, Frédéric & Tansel, Aysit & Turati, Riccardo, 2017. "Do emigrants self-select along cultural traits? Evidence from the MENA countries," MPRA Paper 82778, University Library of Munich, Germany.
    12. Frédéric Docquier & Aysit Tansel & Riccardo Turati, 2017. "Do Emigrants Self-Select Along Cultural Traits? Evidence from the MENA Countries," CESifo Working Paper Series 6777, CESifo.
    13. Riccardo Turati, 2021. "Do you want to migrate to the United States? Migration intentions and Cultural Traits in Latin America," Working Papers wpdea2101, Department of Applied Economics at Universitat Autonoma of Barcelona.
    14. Martin Guzi & Štěpán Mikula, 2022. "Reforms that keep you at home: The effects of economic transition on migration," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(2), pages 289-310, April.
    15. Di Iasio, Valentina & Wahba, Jackline, 2024. "The Determinants of Refugees’ Destinations: Where do refugees locate within the EU?," World Development, Elsevier, vol. 177(C).
    16. Jordi Paniagua & Jesús Peiró-Palomino & Andrés J. Picazo-Tadeo, 2021. "Asylum Migration in OECD Countries: In Search of Lost Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(3), pages 1109-1137, February.
    17. Böhme, Marcus H. & Gröger, André & Stöhr, Tobias, 2020. "Searching for a better life: Predicting international migration with online search keywords," Journal of Development Economics, Elsevier, vol. 142(C).
    18. Bertoli, Simone & Brücker, Herbert & Fernández-Huertas Moraga, Jesús, 2022. "Do applications respond to changes in asylum policies in European countries?," Regional Science and Urban Economics, Elsevier, vol. 93(C).
    19. Heidland, Tobias & Jannsen, Nils & Groll, Dominik & Kalweit, René & Boockmann, Bernhard, 2021. "Analyse und Prognose von Migrationsbewegungen," Kieler Beiträge zur Wirtschaftspolitik 34, Kiel Institute for the World Economy (IfW Kiel).
    20. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2013. "Multilateral resistance to migration," Journal of Development Economics, Elsevier, vol. 102(C), pages 79-100.

    More about this item

    Keywords

    International migration; Discrete choice modelling; Independence from irrelevant alternatives; Cross-nested logit; Migration aspirations;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:irs:cepswp:2021-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Library and Documentation (email available below). General contact details of provider: https://edirc.repec.org/data/cepsslu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.