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A Scrambled Method of Moments

Jean-Jacques Forneron

arXiv 20 Nov 2019 · Econometrics · 1 citations (OpenAlex)

arXiv:1911.09128 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Quasi-Monte Carlo (qMC) methods are a powerful alternative to classical Monte-Carlo (MC) integration. Under certain conditions, they can approximate the desired integral at a faster rate than the usual Central Limit Theorem, resulting in more accurate estimates. This paper explores these methods in a simulation-based estimation setting with an emphasis on the scramble of Owen (1995). For cross-sections and short-panels, the resulting Scrambled Method of Moments simply replaces the random number generator with the scramble (available in most softwares) to reduce simulation noise. Scrambled Indirect Inference estimation is also considered. For time series, qMC may not apply directly because of a curse of dimensionality on the time dimension. A simple algorithm and a class of moments which circumvent this issue are described. Asymptotic results are given for each algorithm. Monte-Carlo examples illustrate these results in finite samples, including an income process with "lots of heterogeneity."

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46
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96
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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
1Gouriéroux, C., Monfort, A. and Renault, E (1993) Indirect inference1.000104100%
2Duffie, D. and Singleton, K (1993) Simulated Moments Estimation of Markov Models of Asset Prices0.92843100%
3Owen, A. B (1995) Randomly permuted (t, m, s)-nets and (t, s)-sequences0.92843100%
4Browning, M., Ejrnaes, M. and Alvarez, J (2010) Modelling Income Processes with Lots of Heterogeneity0.87452100%
5Lemieux, C (2009) Monte Carlo and Quasi-Monte Carlo Sampling0.87452100%
6Jennrich, R. I (1969) Asymptotic properties of non-linear least squares estimators0.7636267%
7White, H (1984) Asymptotic Theory for Econometricians0.7374350%
8van der Vaart, A. W. and Wellner, J. A (1996) Weak Convergence and Empirical Processes0.7373367%
9Pakes, A. and Pollard, D (1989) Simulation and the Asymptotics of Optimization Estimators0.73732100%
10Dick, J. and Pillichshammer, F (2010) Digital Nets and Sequences0.69351100%

Showing the top 10 of 46 scored citations.