Estimation of Dynamic Programming Models with Censored Dependent Variables

Victor Aguirregabiria ()
Authors registered in the RePEc Author Service: David Laidler

No 9711, University of Western Ontario, Departmental Research Report Series from University of Western Ontario, Department of Economics

Abstract: This paper considers the estimation of dynamic structural models where the decision variables are censored. We present and discuss several econometric issues and estimation methods under alternative stochastic structures of the unobservables, different potential sources of censoring, and different characteristics of the dataset (e.g., temporal dimension, frequency of corner solutions, or distribution of duration spells between two consecutive interior solutions). We use a labor demand model with kinked and lump-sum hiring and firing costs to illustrate the econometric problems and estimation methods.

Keywords: DECISION MAKING; ECONOMIC MODELS (search for similar items in EconPapers)
JEL-codes: C15 C34 C63 J23 (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (8)

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