Dynamic discrete choice models with incomplete data: Sharp identification

doi:10.1016/j.jeconom.2023.04.005

Dynamic discrete choice models with incomplete data: Sharp identification

2023-09-01

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DOI：10.1016/j.jeconom.2023.04.005

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Abstract

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In many empirical studies, those states that are relevant for forward-looking economic agents to make decisions may not be included in the data to which researchers have access. This problem often arises in the context of declining/booming industries. In this paper, we develop the sharp identified sets of structural parameters and counterfactuals for dynamic discrete choice models when empirical data do not cover realizations of relevant future states. Applying the proposed method to the annual Toyo Keizai database, we study the behaviors of Japanese firms on foreign direct investments in China without observing the future states after Chinese economy slows down. & COPY; 2023 Elsevier B.V. All rights reserved.

Keywords:

Dynamic discrete choice

Incomplete data

Industry dynamics

Partial identification

Sharp identification

Dynamic discrete choice models with incomplete data: Sharp identification

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