Statistical models in which the endogenous random variables take only discrete values are known as discrete, categorical, qualitative — choice, or quanta! response models.1 This class of models was originally developed by psychologists and later adapted and extended by economists for describing consumers choices. These models have numerous applications because many behavioural responses are qualitative in nature: a commuter decides whether to take public transit; a consumer decides whether to buy a car; a high school student decides whether to attend a college; a housewife decides whether to participate in the labour force, etc. The focus of these models is usually on the individual decision making units. The estimation of these models is also facilitated by the availability of an increasingly large number of survey data on households and individual firms.