A Comparison of Bayesian and Sampling Theory Inferences in a Probit Model

HE PROBIT MODEL IS A POPULAR DEVICE for explaining binary choice decisions in econometrics. It has been used to describe choices such as labor force participation, travel mode, home ownership, and type of education. These and many more examples can be found in papers by Amemiya (1981) and Maddala (1983). Given the contribution of economics towards explaining such choices, and given the nature of data that are collected, prior information on the relationship between a choice probability and several explanatory variables frequently exists. Bayesian inference is a convenient vehicle for including such prior information. Given the increasing popularity of Bayesian inference it is useful to ask whether inferences from a probit model are sensitive to a choice between Bayesian and sampling theory techniques. Of interest is the sensitivity of inference on coefficients, probabilities, and elasticities. We consider these issues in a model designed to explain choice between fixed and variable interest rate mortgages. Two Bayesian priors are employed: a uniform prior on the coefficients, designed to be noninformative for the coefficients, and an inequality restricted prior on the signs of the coefficients. We often know, a priori, whether increasing the value of a particular explanatory variable will have a positive or negative effect on a choice probability. This knowledge can be captured by using a prior probability density function (pdf) that is truncated to be positive or negative. Thus, three sets of results are compared:those from maximum likelihood (ML) estimation, those from Bayesian estimation with an unrestricted uniform prior on the coefficients, and those from Bayesian estimation with a uniform prior truncated to accommodate inequality restrictions on the coefficients.

Family size, economics and child gender preference: A case study in the Nyeri district of Kenya

Kenyan women have more children, especially in rural areas, than in most developing nations. This is widely believed to be an impediment to Kenya’s economic development. Thus, factors influencing family size in the Kenyan context are important for its future. A brief review of economic theories of fertility leads to the conclusion that both economics and social/cultural factors must be considered simultaneously when examining factors that determine the number of children in a family. The need to do this is borne out in Kenya’s situation by utilising responses from a random sample of rural households in the Nyeri district of Kenya. Economic and social/cultural factors intertwine to influence family sizes in this district. After providing a summary of the main statistical results from the survey, we use multiple regression analysis to explore the influences of a woman’s age, level of education, whether she has outside employment, whether the family keeps livestock, whether she expresses a preference for more boys than girls, whether the family uses only family labour (including child labour) and the size of the farm, which is used as a proxy for family income. It was found that preference for male children has an important positive influence on family size in this district. Women were found to have greater preference for male children than their male counterparts possibly because of their fear of being disinherited if they do not produce an heir for their husbands. Preference for sons was also found in allocation of human capital resources at the household level in that the female respondents were found to have lower levels of education than their male counterparts. Various long-term policies are outlined that may help to reduce the number of offspring of women in Kenya.

Public choice of species for the ark: Phylogenetic similarity and preferred wildlife species for survival

Humans play a role in deciding the fate of species in the current extinction wave. Because of the previous Similarity Principle, physical attractiveness and likeability, it has been argued that public choice favours the survival of species that satisfy these criteria at the expense of other species. This paper empirically tests this argument by considering a hypothetical ‘Ark’ situation. Surveys of 204 members of the Australian public inquired whether they are in favour of the survival of each of 24 native mammal, bird and reptile species (prior to and after information provision about each species). The species were ranked by percentage of ‘yes’ votes received. Species composition by taxon in various fractions of the ranking was determined. If the previous Similarity Principle holds, mammals should rank highly and dominate the top fractions of animals saved in the hierarchical list. We find that although mammals would be over-represented in the ‘Ark’, birds and reptiles are unlikely to be excluded when social choice is based on numbers ‘voting’ for the survival of each species. Support for the previous Similarity Principle is apparent particularly after information provision. Public policy implications of this are noted and recommendations are given.

Differential inclusions and robust control theory

Uncontrolled systems (x) over dot is an element of Ax, where A is a non-empty compact set of matrices, and controlled systems (x) over dot is an element of Ax + Bu are considered. Higher-order systems 0 is an element of Px - Du, where and are sets of differential polynomials, are also studied. It is shown that, under natural conditions commonly occurring in robust control theory, with some mild additional restrictions, asymptotic stability of differential inclusions is guaranteed. The main results are variants of small-gain theorems and the principal technique used is the Krasnosel'skii-Pokrovskii principle of absence of bounded solutions.

Should optional properties be used in conceptual modelling? A theory and three empirical tests

An important feature of some conceptual modelling grammars is the features they provide to allow database designers to show real-world things may or may not possess a particular attribute or relationship. In the entity-relationship model, for example, the fact that a thing may not possess an attribute can be represented by using a special symbol to indicate that the attribute is optional. Similarly, the fact that a thing may or may not be involved in a relationship can be represented by showing the minimum cardinality of the relationship as zero. Whether these practices should be followed, however, is a contentious issue. An alternative approach is to eliminate optional attributes and relationships from conceptual schema diagrams by using subtypes that have only mandatory attributes and relationships. In this paper, we first present a theory that led us to predict that optional attributes and relationships should be used in conceptual schema diagrams only when users of the diagrams require a surface-level understanding of the domain being represented by the diagrams. When users require a deep-level understanding, however, optional attributes and relationships should not be used because they undermine users' abilities to grasp important domain semantics. We describe three experiments which we then undertook to test our predictions. The results of the experiments support our predictions.

Estimates of the real structured radius of stability of linear dynamic systems

A question is examined as to estimates of the norms of perturbations of a linear stable dynamic system, under which the perturbed system remains stable in a situation R:here a perturbation has a fixed structure.

Patch dynamics and metapopulation theory: the case of successional species

We present a mathematical framework that combines extinction-colonization dynamics with the dynamics of patch succession. We draw an analogy between the epidemiological categorization of individuals (infected, susceptible, latent and resistant) and the patch structure of a spatially heterogeneous landscape (occupied-suitable, empty-suitable, occupied-unsuitable and empty-unsuitable). This approach allows one to consider life-history attributes that influence persistence in patchy environments (e.g., longevity, colonization ability) in concert with extrinsic processes (e.g., disturbances, succession) that lead to spatial heterogeneity in patch suitability. It also allows the incorporation of seed banks and other dormant life forms, thus broadening patch occupancy dynamics to include sink habitats. We use the model to investigate how equilibrium patch occupancy is influenced by four critical parameters: colonization rate? extinction rate, disturbance frequency and the rate of habitat succession. This analysis leads to general predictions about how the temporal scaling of patch succession and extinction-colonization dynamics influences long-term persistence. We apply the model to herbaceous, early-successional species that inhabit open patches created by periodic disturbances. We predict the minimum disturbance frequency required far viable management of such species in the Florida scrub ecosystem. (C) 2001 Academic Press.

A social identity theory of leadership

A social identity theory of leadership is described that views leadership as a group process generated by social categorization and prototype-based depersonalization processes associated with social identity. Group identification, as self-categorization, constructs an intragroup prototypicality gradient that invests the most prototypical member with the appearance of having influence; the appearance arises because members cognitively and behaviorally conform to the prototype. The appearance of influence becomes a reality through depersonalized social attraction processes that make followers agree and comply with the leader's ideas and suggestions. Consensual social attraction also imbues the leader with apparent status and creates a status-based structural differentiation within the group into leader(s) and followers, which has characteristics of unequal status intergroup relations. In addition, a fundamental attribution process constructs a charismatic leadership personality for the leader, which further empowers the leader and sharpens the leader-follower status differential. Empirical support for the theory is reviewed and a range of implications discussed, including intergroup dimensions, uncertainty reduction and extremism, power, and pitfalls of prototype-based leadership.

Examining the effects of work externalization through the lens of social identity theory

This study examines whether dissimilarity among employees that is based on their work status (i.e., whether they are temporary or internal workers) influences their organization-based self-esteem, their trust in and attraction toward their peers, and their altruism. A model that is based on social identity theory posits that work-status dissimilarity negatively influences each outcome variable and that the strength of this relationship varies depending on whether employees have temporary or internal status and the composition of their work groups. Results that are based on a survey of 326 employees (189 internal and 137 temporary) from 34 work groups, belonging to 2 organizations, indicate that work-status dissimilarity has a systematic negative effect only on outcomes related to internal workers when they work in temporary-worker-dominated groups.