Martin Browning. Michaelmas term, weeks 5-8, 2011. Martin.Browning@
economics.ox.ac.uk. Second year M.Phil.: Structural Modelling. Website: ...
Martin Browning Michaelmas term, weeks 5-8, 2011
[email protected]
Second year M.Phil.: Structural Modelling.
Website: http://www.nuffield.ox.ac.uk/Teaching/Economics/Browning/Structural/
THIS COURSE IS EXAMINABLE
This course will give students some insight into how we can bring together microeconomic theory and micro data in structural models. The latter are models that have ‘deep’ parameters; that is, parameters that are invariant to changes in the economic environment. The polar extreme to structural modelling is quasi-experimental (or natural experiment) modelling which seeks to model reactions to exogenous changes with no attempt to extend this to new situations. The elements of a (micro) structural model include: • well defined objectives for agents (utility maximisation, profit maximisation, cost minimisation, election to office etc); • well defined constraints; • an explicit statement of uncertainty and what the agents know; • the beliefs of the agents; • how constraints, preferences and beliefs vary across agents (heterogeneity); • models of interactions between agents; • some idea of when the above elements will be invariant to changes in the economic environment. Examples: demand analysis; auctions; labour supply and taxes; choosing whether to continue with a course of study. Uses: • • • •
understanding the motivation for behaviour prediction in environments never seen before policy analysis welfare analysis
. Course structure. 1. Two short examples. 2. Structural and non-structural modelling. 3. A long example. Some examples or surveys of structural modelling. Adda, J., Cooper, R., 2000. Balladurette and Juppette: A discrete analysis of scrapping subsidies. Journal of Political Economy 108, 778-806. Cunha, F., Heckman, J., Navarro, S., 2005. Separating uncertainty from heterogeneity in life cycle earnings. Oxford Economic Papers-New Series 57, 191-261. Eckstein, Z., Wolpin, K. I., 1999. Why youths drop out of high school: The impact of preferences, opportunities, and abilities. Econometrica 67, 1295-1339. Heckman, J. J., 2001. Micro data, heterogeneity, and the evaluation of public policy: Nobel lecture. Journal of Political Economy 109, 673-748. Keane, M. P. (2010). "A Structural Perspective on the Experimentalist School." Journal of Economic Perspectives 24(2): 47-58 Laffont, J. J., Vuong, Q., 1996. Structural Analysis of Auction Data. American Economic Review 86, 414-420. Postel-Vinay, F., Robin, J. M., 2002. Equilibrium wage dispersion with worker and employer heterogeneity. Econometrica 70, 2295-2350. Reiss, P. C., Wolak, F. A., 2007. Structural Econometric Modeling: Rationales and Examples from Industrial Organization. In: Heckman, J., J. , Leamer, E., E. , (Eds.), Handbook of Econometrics. Elsevier, pp. 4277-4415. Todd, P. E., Wolpin, K. I., 2006. Assessing the impact of a school subsidy program in Mexico: Using a social experiment to validate a dynamic behavioral model of child schooling and fertility. American Economic Review 96, 1384-1417
