Open Access Te Herenga Waka-Victoria University of Wellington
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Extensions to discrete choice models of labour supply

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posted on 2023-02-15, 02:01 authored by Christopher Ball

This thesis considers extensions to discrete choice models of labour supply, primarily in the context of decisions made by families in response to policy changes to taxes and transfers. The main contributions of this thesis are: 1) introducing a non-parametric choice set sampled from similar families that includes social transfer receipt as a choice characteristic, in addition to the typical dimensions of wage rates and hours worked; 2) providing a novel estimation approach for discrete choice models of labour supply that adjusts the number of choices to allow for substitution and complementarity while preserving the Independence of Irrelevant Alternatives assumption as far as possible, leading to parameter estimates with likelihoods close to the maximum likelihood; 3) providing a method that adjusts for nuisance changes occurring between the data year and the policy implementation year through multi-stage ``chaining'' of labour supply simulations at the individual level; and 4) flexibly extending the preference estimation to allow for individual heterogeneity while enforcing the aggregate parametric distributional family for the preference estimates. Each of the 4 contributions in the main chapters are illustrated through empirical examples using synthetic household survey data for New Zealand, developed using the nearest neighbour aggregation technique described in the appendix. This approach provides high-quality synthetic data with multivariate distributions that closely match the source data across many dimensions.


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Date of Award



Te Herenga Waka—Victoria University of Wellington

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Degree Discipline


Degree Grantor

Te Herenga Waka—Victoria University of Wellington

Degree Level


Degree Name

Doctor of Philosophy

ANZSRC Socio-Economic Outcome code

150508 Microeconomic effects of taxation; 150509 Preference, behaviour and welfare; 150507 Micro labour market issues; 150206 Income distribution; 150210 Taxation

ANZSRC Type Of Activity code

1 Pure basic research

Victoria University of Wellington Item Type

Awarded Doctoral Thesis



Victoria University of Wellington School

School of Accounting and Commercial Law


Creedy, John; Gemmell, Norman