Sequential Estimation of Dynamic Discrete Games

This paper studies the estimation of dynamic discrete games of incomplete information. Two main econometric issues appear in the estimation of these models: the indeterminacy problem associated with the existence of multiple equilibria and the computational burden in the solution of the game. We propose a class of pseudo maximum likelihood (PML) estimators that deals with these problems, and we study the asymptotic and finite sample properties of several estimators in this class. We first focus on two‐step PML estimators, which, although they are attractive for their computational simplicity, have some important limitations: they are seriously biased in small samples; they require consistent nonparametric estimators of players' choice probabilities in the first step, which are not always available; and they are asymptotically inefficient. Second, we show that a recursive extension of the two‐step PML, which we call nested pseudo likelihood (NPL), addresses those drawbacks at a relatively small additional computational cost. The NPL estimator is particularly useful in applications where consistent nonparametric estimates of choice probabilities either are not available or are very imprecise, e.g., models with permanent unobserved heterogeneity. Finally, we illustrate these methods in Monte Carlo experiments and in an empirical application to a model of firm entry and exit in oligopoly markets using Chilean data from several retail industries.     

A note on the changing relationship between fertility and female employment rates in developed countries

In this paper we look at a panel of OECD aggregate fertility and labor market data between 1970 and 1995 and we report some striking recent developments. Total Fertility Rates (TFR) were falling and Female Participation Rates (FPR) were increasing, conforming to a well known long-run trend. Along the cross-sectional dimension, the correlation between TFR and FPR was negative and significant during the 1970's and up to the early 1980's. This seemed consistent with secular comovements. However, by the late 1980's the correlation had become positive and equally significant. We discuss our findings within the framework of standard neoclassical models of fertility and labor supply adapted to macro data, as in Butz and Ward (1979). Received: 14 April 2000/Accepted: 29 December 2000 All correspondence to Pedro Mira. Namkee Ahn is grateful for financial support received from the Bank of Spain and from Spain's Ministerio de Educación y Cultura, grant SEC97-1249. We benefited from comments by two anonymous referees and by seminar participants at FEDEA, CEMFI and ESPE-98. All remaining errors are our own. Responsible editor: John F. Ermisch.     

Clustering to reduce regional heterogeneity: A spanish case-study

Statistical methods of dimension reduction and classification are used to obtain homogeneous local-area clustering with regard to the most relevant demographic parameters. The dimension reduction is conducted in two stages using Principal Component Analysis and a modified k-mean procedure is proposed to determine the final clusters. This clustering will be useful in future demographic studies at a local level, in particular to obtain forecasts of demographic rates and population projections. The region of Castile and León in Spain is used to illustrate the method. A Poisson model is used to explore the advantages of the new clustering over the more conventional classification based on provinces.     

The Impact of Overeducation on Wages of Recent Economic Sciences Graduates

Social Indicators Research - United Nations Development Program presented the Human Development Index for ranking the countries with regard to three dimensions, namely being knowledgeable, a long...     

Decomposing Bayesian networks: triangulation of the moral graph with genetic algorithms

In this paper we consider the optimal decomposition of Bayesian networks. More concretely, we examine empirically the applicability of genetic algorithms to the problem of the triangulation of moral graphs. This problem constitutes the only difficult step in the evidence propagation algorithm of Lauritzen and Spiegelhalter (1988) and is known to be NP-hard (Wen, 1991). We carry out experiments with distinct crossover and mutation operators and with different population sizes, mutation rates and selection biasses. The results are analysed statistically. They turn out to improve the results obtained with most other known triangulation methods (Kjærulff, 1990) and are comparable to results obtained with simulated annealing (Kjærulff, 1990; Kjærulff, 1992).     

Identification of mother-child interaction patterns:: A longitudinal evaluation of early age intervention effects on early adolescents

Evidence is offered that meaningful patterns of mother-child interaction could be detected in families more than 10 years after a family-centered, early age, preventive intervention. The interactions of mother-child dyads in a situational test during the child's early adolescence were examined for three experimental conditions: a lower socioeconomic experimental group that participated in the intervention for approximately 2 years, an untreated lower socioeconomic, and an untreated upper middle socioeconomic control group.Factor analyses of family interaction measures revealed three factors, which were called Democratic-Participatory Interaction, Mixed Dominance Interaction, and Mother Controlled Interaction. Separate ANOVAS based on factor scores were performed for each factor. Both the intervention group and the middle socioeconomic comparison group were significantly higher than in the lower socioeconomic comparison group in the first factor.     

Threshold Cointegration and the PPP Hypothesis

Self-Exciting Threshold Autoregressive (SETAR) models are a non-linear variant of conventional linear Autoregressive (AR) models. One advantage of SETAR models over conventional AR models lies in its flexible nature in dealing with possible asymmetric behaviour of economic variables. The concept of threshold cointegration implies that the Error Correction Mechanism (ECM) at a particular interval is inactive as a result of adjustment costs, and active when deviations from equilibrium exceed certain thresholds. For instance, the presence of adjustment costs can, in many circumstances, justify the fact that economic agents intervene to recalibrate back to a tolerable limit, as in the case when the benefits of adjustment are superior to its costs. We introduce an approach that accounts for potential asymmetry and we investigate the presence of the relative version of the purchasing power parity (PPP) hypothesis for 14 countries. Based on a threshold cointegration adaptation of the unit root test procedure suggested by Caner & Hansen (2001), we find evidence of an asymmetric adjustment for the relative version of PPP for eight pairs of countries.     

Efficiency of a Linear Combination of the Median and the Sample Mean: The Double Truncated Normal Distribution

Abstract.  We characterize all symmetric location models for which a linear combination of the median and the sample mean is an asymptotically efficient estimator of the location parameter. The resulting model can be understood as a symmetrized or double truncated normal distribution. A simple algorithm to estimate the parameters is given and an application is presented.     

Sexual modes questionnaire: Measure to assess the interaction among cognitions,emotions, and sexual response

The goal of the present article is to present a new measure developed to assess cognitive and emotional factors of sexual function. This instrument was developed especially to test some hypotheses derived from Beck's new theoretical conceptualization (the modes theory; A. T. Beck, 1996). This model, characterized by its systemic and integrated approach, constitutes a remarkable development from a linear to a network perspective of the cognitive‐emotional‐behavioral processes. The new concept of mode, as a composite of schemas (cognitive, emotional, and behavioral) interacting together, is theoretically sound and supported by recent research findings from clinical and experimental sets (see A. T. Beck, 1996, for a revision). Our aim is to develop a new measure specifically created to assess these integrated and interdependent processes in the field of sexuality. The Sexual Modes Questionnaire (SMQ; male and female versions) is a combined measure constituted by three interdependent subscales: automatic thoughts, emotions, and sexual response presented during sexual activity. Psychometric studies showed good reliability and validity results in both versions, and high correlations between several dimensions of the three subscales support the concept of mode and its interactional character. Moreover, the capacity showed by the SMQ to discriminate between sexually functional and dysfunctional subjects and its high correlations with measures of sexual functioning emphasize the role of cognitive‐emotional processes on sexual problems, supporting the clinical value of the measure.