The causal relationship between Individual’s choice behavior and self-reported satisfaction: the case of residential mobility in the EU

One of the most persistent and lasting debates in economic research refers to whether the answers to subjective questions can be used to explain individuals’ economic behavior. Using panel data for twelve EU countries, in the present study we analyze the causal relationship between self-reported housing satisfaction and residential mobility. Our results indicate that: i) households unsatisfied with their current housing situation are more likely to move; ii) housing satisfaction raises after a move, and; iii) housing satisfaction increases with the transition from being a renter to becoming a homeowner. Some interesting cross-country differences are observed. Our findings provide evidence in favor of use of subjective indicators of satisfaction with certain life domains in the analysis of individuals’ economic conduct.

The choice of banking firm: Are the interest rate a significant criteria?

The objective of the research is to know the factors that in Spain determine the choice of banking organization. The obtained results indicate that the dimension of the network of branches is the reason more valued. In spite of the increasing symmetry of the Spanish banking market, the preferences of the clients of the savings banks and those of the banks are not absolutely coincident, being the proximity - the main reason for election- much more valued by the former than by the latter. The existence of divergences in the preferences has also been detected according to the region and the typology of city of residence.

Assisted Reproductive Technologies (ART) in a Model of Fertility Choice

This paper provides a simple theoretical framework to discuss the relationship between assisted reproductive technologies and the microeconomics of fertility choice. Individuals make choices of education and work along with decisions about whether and when to have children. Decisions regarding fertility are influenced by policy and labor market factors that affect the earnings opportunities of mothers and the costs of raising children. We show how observed differences in these economic factors across countries explain observed different fertility and childbearing age patterns. We then use the model to predict behavioral responses to biomedical improvements in assisted reproductive technologies, and hence the impact of these technologies on fertility.

Choice of Contracts in the British National Health Service: An Empirical Study

Following major reforms of the British National Health Service (NHS) in 1990, the roles of purchasing and providing health services were separated, with the relationship between purchasers and providers governed by contracts. Using a mixed multinomial logit analysis, we show how this policy shift led to a selection of contracts that is consistent with the predictions of a simple model, based on contract theory, in which the characteristics of the health services being purchased and of the contracting parties influence the choice of contract form. The paper thus provides evidence in support of the practical relevance of theory in understanding health care market reform.

Moody choice

If choices depend on the decision maker's mood, is the attempt to derive any consistency in choice doomed? In this paper we argue that, even with full unpredictability of mood, the way choices from a menu relate to choices from another menu exhibits some structure. We present two alternative models of 'moody choice' and show that, in either of them, not all choice patterns are possible. Indeed, we characterise both models in terms of consistency requirements of the observed choice data.

The marginal utility of money: A modern Marshallian approach to consumer choice

We reformulate neoclassical consumer choice by focusing on lambda, the marginal utility of money. As the opportunity cost of current expenditure, lambda is approximated by the slope of the indirect utility function of the continuation. We argue that lambda can largely supplant the role of an arbitrary budget constraint in partial equilibrium analysis. The result is a better grounded, more flexible and more intuitive approach to consumer choice.

Rebellion against Reason? A Study of Expressive Choice and Strikes

In this paper we challenge the conventional view that strikes are caused by asymmetric information regarding rm profitability such that union members are uninformed. Instead, we build an expressive model of strikes where the perception of unfairness provides the expressive benefi t of voting for a strike. The model predicts that larger union size increases both wage offers and the incidence of strikes. Furthermore, while asymmetric information is still important in causing strikes, we find that it is the employer who is not fully informed about the level of emotionality within the union, thereby contributing to strike incidence. An empirical test using UK data provides support for the predictions. In particular, union size has a positive effect on the incidence of strikes and other industrial actions even when asymmetric information regarding profitability is controlled for.

Rebellion against Reason? A Study of Expressive Choice and Strikes

In this paper we challenge the conventional view that strikes are caused by asymmetric information regarding firm protability such that union members are uninformed. Instead, we build an expressive model of strikes where the perception of unfairness provides the expressive benefit of voting for a strike. The model predicts that larger union size increases both wage offers and the incidence of strikes. Furthermore, while asymmetric information is still important in causing strikes, we find that it is the employer who is not fully informed about the level of emotionality within the union, thereby contributing to strike incidence. An empirical test using UK data provides support for the predictions. In particular, union size has a positive effect on the incidence of strikes and other industrial actions even when asymmetric information regarding protability is controlled for.

A Behavioural Model of Choice in the Presence of Decision Conflict

This paper proposes a model of choice that does not assume completeness of the decision maker’s preferences. The model explains in a natural way, and within a unified framework of choice when preference-incomparable options are present, four behavioural phenomena: the attraction effect, choice deferral, the strengthening of the attraction effect when deferral is per-missible, and status quo bias. The key element in the proposed decision rule is that an individual chooses an alternative from a menu if it is worse than no other alternative in that menu and is also better than at least one. Utility-maximising behaviour is included as a special case when preferences are complete. The relevance of the partial dominance idea underlying the proposed choice procedure is illustrated with an intuitive generalisation of weakly dominated strategies and their iterated deletion in games with vector payoffs.

Characterizing Behavioral Decisions with Choice Datas

A number of different models with behavioral economics have a reduced form representation where potentially boundedly rational decision-makers do not necessarily internalize all the consequences of their actions on payoff relevant features (which we label as psychological states) of the choice environment. This paper studies the restrictions that such behavioral models impose on choice data and the implications they have for welfare analysis. First, we propose a welfare benchmark that is justified using standard axioms of rational choice and can be applied to a number of existing seminal behavioral economics models. Second, we show that Sen's axioms and fully characterize choice data consistent with behavioral decision-makers. Third, we show how choice data to infer information about the normative signi.cance of psychological states and establish the possibility of identifying welfare dominated choices.

Tractable Consumer Choice

We derive a rational model of separable consumer choice which can also serve as a behavioral model. The central construct is [lambda] , the marginal utility of money, derived from the consumer's rest-of-life problem. We present a robust approximation of [lambda], and show how to incorporate liquidity constraints, indivisibilities and adaptation to a changing environment. We fi nd connections with numerous historical and recent constructs, both behavioral and neoclassical, and draw contrasts with standard partial equilibrium analysis. The result is a better grounded, more flexible and more intuitive description of consumer choice.

An investigation of the determinants of household demand for bushmeat in the Serengeti using an open-ended choice experiment

Illegal hunting for bushmeat is regarded as an important cause of biodiversity decline in Africa. We use a stated preferences method to obtain information on determinants of demand for bushmeat in villages around the Serengeti National Park, Tanzania. We estimate the effects of changes in the own price of bushmeat and in the prices of two substitute protein sources – fish and chicken. Promoting the availability of protein substitutes at lower prices would be effective at reducing pressures on wildlife. Supply-side measures that raise the price of bushmeat would also be effective.

Local adaptation and matching habitat choice in female barn owls with respect to melanic coloration.

Local adaptation is a major mechanism underlying the maintenance of phenotypic variation in spatially heterogeneous environments. In the barn owl (Tyto alba), dark and pale reddish-pheomelanic individuals are adapted to conditions prevailing in northern and southern Europe, respectively. Using a long-term dataset from Central Europe, we report results consistent with the hypothesis that the different pheomelanic phenotypes are adapted to specific local conditions in females, but not in males. Compared to whitish females, reddish females bred in sites surrounded by more arable fields and less forests. Colour-dependent habitat choice was apparently beneficial. First, whitish females produced more fledglings when breeding in wooded areas, whereas reddish females when breeding in sites with more arable fields. Second, cross-fostering experiments showed that female nestlings grew wings more rapidly when both their foster and biological mothers were of similar colour. The latter result suggests that mothers should particularly produce daughters in environments that best match their own coloration. Accordingly, whiter females produced fewer daughters in territories with more arable fields. In conclusion, females displaying alternative melanic phenotypes bred in habitats providing them with the highest fitness benefits. Although small in magnitude, matching habitat selection and local adaptation may help maintain variation in pheomelanin coloration in the barn owl.

Choice, Deferral and Consistency

In this paper we study decision making in situations where the individual’s preferences are not assumed to be complete. First, we identify conditions that are necessary and sufficient for choice behavior in general domains to be consistent with maximization of a possibly incomplete preference relation. In this model of maximally dominant choice, the agent defers/avoids choosing at those and only those menus where a most preferred option does not exist. This allows for simple explanations of conflict-induced deferral and choice overload. It also suggests a criterion for distinguishing between indifference and incomparability based on observable data. A simple extension of this model also incorporates decision costs and provides a theoretical framework that is compatible with the experimental design that we propose to elicit possibly incomplete preferences in the lab. The design builds on the introduction of monetary costs that induce choice of a most preferred feasible option if one exists and deferral otherwise. Based on this design we found evidence suggesting that a quarter of the subjects in our study had incomplete preferences, and that these made significantly more consistent choices than a group of subjects who were forced to choose. The latter effect, however, is mitigated once data on indifferences are accounted for.

Partial Knowledge Restrictions on theTwo-Stage Threshold Model of Choice

In the context of the two-stage threshold model of decision making, with the agent’s choices determined by the interaction Of three “structural variables,” we study the restrictions on behavior that arise when one or more variables are xogenously known. Our results supply necessary and sufficient conditions for consistency with the model for all possible states of partial Knowledge, and for both single- and multivalued choice functions.