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Creating Investment Scheme with State Space Modeling

Author

Listed:
  • James Andreoni

    (Department of Economics, University of California, San Diego amd MBER)

  • Michael Callen

    (Rady School of Managemen, the University of Southern California and NBER)

  • Muhammad Karrar Hussain

    (Rady School of Management (UCSD), University of California San Diego)

  • Muhammad Yasir Khan

    (Haas School of Business, University of California Berkeley)

  • Charles Sprenger

    (Rady School of Management, University of California, San Diego)

Abstract

We use structural estimates of time preferences to customize incentives for a sample of polio vaccinators in Lahore, Pakistan. We measure time preferences using intertemporal allocations of effort, and derive the mapping between these structural estimates and individually optimized incentives. We evaluate the effect of matching contract terms to discounting parameters in a subsequent experiment with the same vaccinators. This exercise provides a test of the specific point predictions given by structural estimates of discounting parameters. We demonstrate that tailoring contract terms to individual discounting moves allocation behavior significantly towards the intended objective.

Suggested Citation

  • James Andreoni & Michael Callen & Muhammad Karrar Hussain & Muhammad Yasir Khan & Charles Sprenger, 2017. "Creating Investment Scheme with State Space Modeling ," CIRJE F-Series CIRJE-F-1039, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2017cf1039
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2017/2017cf1039.pdf
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