Working Paper: NBER ID: w30094
Authors: Gizem Koar; Cormac O'Dea
Abstract: A growing literature uses now widely-available data on beliefs and expectations in the estimation of structural models. In this chapter, we review this literature, with an emphasis on models of individual and household behavior. We first show how expectations data have been used to relax strong assumptions about beliefs and outline how they can be used in estimation to substitute for, or as a complement to, data on choices. Next, we discuss the literature that uses different types of expectations data in the estimation of structural models. We conclude by noting directions for future research.
Keywords: No keywords provided
JEL Codes: C51; D15; D83; D84
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Expectations data (Y10) | Relaxation of rational expectations (D84) |
| Expectations data (Y10) | Divergence between subjective beliefs and actual distributions (D80) |
| Expectations data (Y10) | Decision-making processes (D87) |
| Expectations data (Y10) | Identification of parameters related to survival probabilities (C41) |
| Expectations data (Y10) | Identification of parameters related to wage offers (J31) |
| Expectations data (Y10) | Identification of parameters related to social security rules (H55) |
| Identification of parameters related to survival probabilities (C41) | Consumption choices (D10) |
| Identification of parameters related to wage offers (J31) | Labor supply choices (J22) |
| Identification of parameters related to social security rules (H55) | Labor supply choices (J22) |