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A Comment on "Estimating Dynamic Discrete Choice Models with Hyperbolic Discounting" by Hanming Fang and Yang Wang

Jaap H. Abbring, Øystein Daljord

arXiv 16 May 2019 · Econometrics · publishedInternational Economic Review (2020) · 9 citations (OpenAlex)

arXiv:1905.07048 · PDF · DOI · OpenAlex · Extracted main text

Abstract

The recent literature often cites Fang and Wang (2015) for analyzing the identification of time preferences in dynamic discrete choice under exclusion restrictions (e.g. Yao et al., 2012; Lee, 2013; Ching et al., 2013; Norets and Tang, 2014; Dub\'e et al., 2014; Gordon and Sun, 2015; Bajari et al., 2016; Chan, 2017; Gayle et al., 2018). Fang and Wang's Proposition 2 claims generic identification of a dynamic discrete choice model with hyperbolic discounting. This claim uses a definition of "generic" that does not preclude the possibility that a generically identified model is nowhere identified. To illustrate this point, we provide two simple examples of models that are generically identified in Fang and Wang's sense, but that are, respectively, everywhere and nowhere identified. We conclude that Proposition 2 is void: It has no implications for identification of the dynamic discrete choice model. We show that its proof is incorrect and incomplete and suggest alternative approaches to identification.

Citation extraction

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Fang, H. and Y. Wang (2015) Estimating dynamic discrete choice models with hyperbolic discounting, with an application to mammography decisions1.000484100%
2Abbring, J. H. and . Daljord (2019) Identifying the discount factor in dynamic discrete choice models self0.58531100%
3Ekeland, I., J. J. Heckman, and L. Nesheim (2004) Identification and estimation of hedonic models0.58531100%
4McManus, D. A (1992) How common is identification in parametric models?0.51121100%
5Mas-Colell, A. (1985, October) (1985) The Theory of General Economic Equilibrium0.51121100%
6Hotz, V. J. and R. A. Miller (1993) Conditional choice probabilities and the estimation of dynamic models0.51121100%
7Ching, A., T. Erdem, and M. P. Keane (2013) Learning models: An assessment of progress, challenges, and new developments0.40511100%
8Lee, R (2013) Vertical integration and exclusivity in platform and two-sided markets0.40511100%
9Abbring, J. H., . Daljord, and F. Iskhakov (2018) Identifying present-biased discount functions in dynamic discrete choice models self0.40511100%
10De Groote, O. and F. Verboven (2018, May) (2018) Subsidies and myopia in technology adoption: Evidence from solar photovoltaic systems0.40511100%

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Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Identifying Dynamic Discrete Choice Models with Hyperbolic Discounting0.64422