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Structural Estimation and Policy Evaluation in Developing Countries

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Author Info
Petra E. Todd () (Department of Economics, University of Pennsylvania)
Kenneth I. Wolpin () (Department of Economics, University of Pennsylvania)
Abstract

This paper discusses the use of discrete choice dynamic programming (DCDP) methods for evaluating policies of particular relevance to developing countries, such as policies to reduce child labor and increase school attendance, to improve school quality, to affect immigration flows, to expand old age pension benefits, or to foster small business investment through microfinance. We describe the DCDP framework and how it relates to static models, illustrate its application with an example related to conditional cash transfer programs, consider numerous empirical applications from the literature of how the DCDP methodology has been used to address substantively important policy issues, and discuss methods for model validation.

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Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 09-028.

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Length: 38 pages
Date of creation: 24 Jul 2009
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Handle: RePEc:pen:papers:09-028

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Related research
Keywords: development economics; policy evaluation; dynamic discrete choice models; schooling; migration;

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Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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  5. Pakes, Ariel S, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," Econometrica, Econometric Society, vol. 54(4), pages 755-84, July. [Downloadable!] (restricted)
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  11. Aiyagari, S Rao, 1994. "Uninsured Idiosyncratic Risk and Aggregate Saving," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 659-84, August. [Downloadable!] (restricted)
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