Estimation of Dynastic Life-Cycle Discrete Choice Models

George-Levi Gayle (), Limor Golan () and Mehmet A. Soytas

No 2015-20, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper explores the estimation of a class of life-cycle discrete choice intergenerational models. It proposes a new semiparametric estimator. It shows that it is root-N-consistent and asymptotically normally distributed. We compare our estimator with a modified version of the full solution maximum likelihood estimator (MLE) in a Monte Carlo study. Our estimator performs comparably to the MLE in a finite sample but greatly reduces the computational cost. The paper documents that the quantity-quality trade-offs depend on the household composition and specialization in the household. Using the proposed estimator, we estimate a dynastic model that rationalizes these observed patterns.

JEL-codes: C13 J13 J22 J62 (search for similar items in EconPapers)
Pages: 82 pages
Date: 2015-08-13
New Economics Papers: this item is included in nep-dcm, nep-ecm and nep-ore
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Estimation of dynastic life‐cycle discrete choice models (2018)
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