Structural Models: Inception and Frontier

Galiani, Sebastián; Pantano, Juan

doi:10.2139/ssrn.3799559

Cited by 3 publications

(3 citation statements)

References 258 publications

(191 reference statements)

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“…Indeed, we find that 82% of the high-ability individuals facing the choice of attending the 11th year in academic track would not have completed this education had it not triggered the option of continuing further to attain a high school diploma. By contrast, in the vocational track, the option value contributions are 4 The recent review by Galiani and Pantano (2021) also emphasizes the need for model validation and provides a structured review of the small literature. 5 A negative return to a choice alternative in our model reflects that an individual expects to receive a higher reward from another choice alternative; i.e., the respective choice alternative is thus not chosen.…”

Section: Introductionmentioning

confidence: 99%

Sequential Choices, Option Values, and the Returns to Education

Bhuller¹,

Eisenhauer²,

Mendel³

2022

Preprint

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Using detailed Norwegian data on earnings and education histories, we estimate a dynamic structural model of schooling and work decisions that captures our data's rich patterns over the life-cycle. We validate the model against variation in schooling choices induced by a compulsory schooling reform. Our approach allows us to estimate the ex-ante returns to different schooling tracks at different stages of the life-cycle and quantify the contribution of option values. We find substantial heterogeneity in returns and establish crucial roles for option values and re-enrollment in determining schooling choices and the impact of schooling policies.

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Section: Introductionmentioning

confidence: 99%

Sequential Choices, Option Values, and the Returns to Education

Bhuller¹,

Eisenhauer²,

Mendel³

2022

Preprint

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“…Attanasio et al (2012); Lagakos et al (2017); Salz and Vespa (2017). See Galiani and Pantano (2021) for a valuable recent summary and discussion of combining random (or quasi-random) variation with structural modeling.…”

Section: Introductionmentioning

confidence: 99%

Experimentally Validating Welfare Evaluation of School Vouchers: Part I

Arcidiacono¹,

Muralidharan²,

Shim³

et al. 2021

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In this paper, we use a unique two-stage experiment that randomized access to school vouchers across both markets and students in rural India to estimate the revealed preference value of school choice. In the first step of the research design, we develop an empirical model of school choice subject to liquidity and credit constraints that is estimated using data from only the control markets. Based on this exercise, we estimate that the voucher generated welfare gains exceeding four times the average private school's annual tuition on average to the students induced into private schooling. The second step of the research design will validate the estimated welfare impacts by comparing model predictions for a simulated voucher program in control markets with the data from the treatment group. The results in this paper are based on the first step (using only control data) and this draft serves as a pre-commitment to the model estimates and predictions before examining the experimental data.

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“…;Lagakos et al (2017);Salz and Vespa (2017). SeeGaliani and Pantano (2021) for a valuable recent summary and discussion of combining random (or quasi-random) variation with structural modeling.7 An important example isMisra and Nair (2011), who use a structural model of salesperson effort to provide recommendations for designing compensation contracts. The firm then implemented these suggestions, permitting validation of the model against the observed responses.…”

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confidence: 99%