Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232842 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14090
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The question of how people revise their decisions about whether to emigrate, and where to, when facing changes in the global environment is of critical importance in migration literature. We propose a cross-nested logit (CNL) approach to generalize the way deviations from the IIA (independence from irrelevant alternatives)) hypothesis can be tested and exploited in migration studies. Compared with the widely used logit model, the structure of a CNL model allows for more sophisticated substitution patterns between destinations. To illustrate the relevance of our approach, we provide a case study using migration aspiration data from India. We demonstrate that the CNL approach outperforms standard competing approaches in terms of quality of fit, has stronger predictive power, implies stronger heterogeneity in responses to shocks, and highlights complex and intuitive substitution patterns between all possible alternatives. In particular, we shed light on the low degree of substitutability between the home and foreign alternatives as well as on the subgroups of countries that are considered by potential Indian movers as highly or poorly substitutable.
Subjects: 
international migration
discrete choice modelling
independence from irrelevant alternatives
cross-nested logit
migration aspirations
JEL: 
C25
F22
J61
Document Type: 
Working Paper

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