Bayesian inference in models based on equilibrium search theory
In this paper we begin by developing practical Bayesian methods for inference in a standard equilibrium search model. We then consider two models which are more flexible, but centered over the equilibrium search model using Bayesian priors. Such priors can be used to control the degree of confidence the researcher has in the assumption of optimal individual or firm behaviour. Subsequently, we extend the model to allow for non-linearity in production and unobserved heterogeneity. The former extension is of interest since a closed form expression for the wage distribution does not exist and, hence, empirical work involving this potentially important extension has not been done. However, we show how Bayesian simulation methods can be used for empirical analysis. The paper concludes with an empirical exercise involving the school-to-work transitions of Canadian and US school leavers.
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- Kiefer, Nicholas M & Steel, Mark F J, 1998. "Bayesian Analysis of the Prototypal Search Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(2), pages 178-86, April.
- van den Berg, Gerard J, 1999. "Empirical Inference with Equilibrium Search Models of the Labour Market," Economic Journal, Royal Economic Society, vol. 109(456), pages F283-306, June.
- Koning, Pierre & Ridder, Geert & van den Berg, Gerard J, 1995. "Structural and Frictional Unemployment in an Equilibrium Search Model with Heterogeneous Agents," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages S133-51, Suppl. De.
- Bontemps, Christian & Robin, Jean-Marc & Van den Berg, Gerard J, 1999. "An Empirical Equilibrium Job Search Model with Search on the Job and Heterogeneous Workers and Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 1039-74, November.
- Ferrall, Christopher, 1997. "Unemployment Insurance Eligibility and the School-to-Work Transition in Canada and the United States," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 115-29, April.
- Lancaster, Tony, 1997. "Exact Structural Inference in Optimal Job-Search Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 165-79, April.
- repec:dgr:uvatin:19980089 is not listed on IDEAS
- Berg, G.J. & Ridder, G., 1993.
"An empirical equilibrium search model of the labour market,"
Serie Research Memoranda
0039, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Gerard J. van den Berg & Geert Ridder, 1998. "An Empirical Equilibrium Search Model of the Labor Market," Econometrica, Econometric Society, vol. 66(5), pages 1183-1222, September.
- Christensen, Bent Jesper & Kiefer, Nicholas M., 1997. "Inference in non-linear panel models with partially missing observations The case of the equilibrium search model," Journal of Econometrics, Elsevier, vol. 79(2), pages 201-219, August.
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