Working Paper
Estimation of Dynastic Life-Cycle Discrete Choice Models
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 Classification: C13; J13; J22; J62;
https://doi.org/10.20955/wp.2015.020
Access Documents
File(s):
File format is application/pdf
https://s3.amazonaws.com/real.stlouisfed.org/wp/2015/2015-020.pdf
Description: Full text
Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Working Papers
Publication Date: 2015-08-13
Number: 2015-20