EconPapers    
Economics at your fingertips  
 

Heterogeneous Choice Sets and Preferences

Levon Barseghyan (), Maura Coughlin, Francesca Molinari and Joshua Teitelbaum

Papers from arXiv.org

Abstract: We propose a robust method of discrete choice analysis when agents' choice sets are unobserved. Our core model assumes nothing about agents' choice sets apart from their minimum size. Importantly, it leaves unrestricted the dependence, conditional on observables, between agents' choice sets and their preferences. We first establish that the model is partially identified and characterize its sharp identification region. We also show how the model can be used to assess the welfare cost of limited choice sets. We then apply our theoretical findings to learn about households' risk preferences and choice sets from data on their deductible choices in auto collision insurance. We find that the data can be explained by expected utility theory with relatively low levels of risk aversion and heterogeneous choice sets. We also find that a mixed logit model, as well as some familiar models of choice set formation, are rejected in our data.

New Economics Papers: this item is included in nep-dcm and nep-upt
Date: 2019-07
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://arxiv.org/pdf/1907.02337 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1907.02337

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().

 
Page updated 2019-11-05
Handle: RePEc:arx:papers:1907.02337