Another Look at the Identification of Dynamic Discrete Decision Processes: With an Application to Retirement Behavior

Victor Aguirregabiria ()

Working Papers from University of Toronto, Department of Economics

Abstract: This paper deals with the estimation of the behavioral and welfare effects of counterfactual policy interventions in dynamic structural models where all the primitive functions are nonparametrically specified (i.e., preferences, technology, transition rules, and distribution of unobserved variables). It proves the nonparametric identification of agents' decision rules, before and after the policy intervention, and of the change in agents' welfare. Based on these results we propose a nonparametric procedure to estimate the behavioral and welfare effects of a general class of counterfactual policy interventions. The nonparametric estimator can be used to construct a test of the validity of a particular parametric specification. We apply this method to evaluate hypothetical reforms in the rules of a public pension system using a model of retirement behavior and a sample of workers in Sweden.

Keywords: Dynamic discrete decision processes; Nonparametric identification; Counterfactual policy interventions; Retirement behavior. (search for similar items in EconPapers)
JEL-codes: C13 C25 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2007-03-27
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.economics.utoronto.ca/public/workingPapers/tecipa-282.pdf Main Text (application/pdf)

Related works:
Working Paper: Another Look at the Identification of Dynamic Discrete Decision Processes: With an Application to Retirement Behavior (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-282

Access Statistics for this paper

More papers in Working Papers from University of Toronto, Department of Economics 150 St. George Street, Toronto, Ontario.
Bibliographic data for series maintained by RePEc Maintainer ().