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Identification of Ex Ante Returns Using Elicited Choice Probabilities: An Application to Preferences for Public-Sector Jobs

Author

Listed:
  • Meango, Romuald

    (University of Oxford)

  • Girsberger, Esther Mirjam

    (University of Technology, Sydney)

Abstract

Ex ante returns, the net value that agents perceive before they take an investment decision, are understood as the main drivers of individual decisions. Hence, their distribution in a population is an important tool for counterfactual analysis and policy evaluation. This paper studies the identification of the population distribution of ex ante returns using stated choice experiments, in the context of binary investment decisions. The environment is characterised by uncertainty about future outcomes, with some uncertainty being resolved over time. In this context, each individual holds a probability distribution over different levels of returns. The paper provides novel, nonparametric identification results for the population distribution of returns, accounting for uncertainty. It complements these with a nonparametric/semiparametric estimation methodology, which is new to the stated-preference literature. Finally, it uses these results to study the preference of high ability students in Côte d'Ivoire for public-sector jobs and how the competition for talent affects the expansion of the private sector.

Suggested Citation

  • Meango, Romuald & Girsberger, Esther Mirjam, 2024. "Identification of Ex Ante Returns Using Elicited Choice Probabilities: An Application to Preferences for Public-Sector Jobs," IZA Discussion Papers 17174, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17174
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    More about this item

    Keywords

    subjective expectations; ex ante returns; nonseparable panel; distribution regression; job search; public sector;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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