arXiv 26 Jan 2021 · Econometrics
arXiv:2101.10941 · PDF · DOI · OpenAlex · Extracted main text
I describe a method for estimating agents' perceived returns to investments that relies on cross-sectional data containing binary choices and prices, where prices may be imperfectly known to agents. This method identifies the scale of perceived returns by assuming agent knowledge of an identity that relates profits, revenues, and costs rather than by eliciting or assuming agent beliefs about structural parameters that are estimated by researchers. With this assumption, modest adjustments to standard binary choice estimators enable consistent estimation of perceived returns when using price instruments that are uncorrelated with unobserved determinants of agents' price misperceptions as well as other unobserved determinants of their perceived returns. I demonstrate the method, and the importance of using price variation that is known to agents, in a series of data simulations.
appendix boundary found by appendix_command · 26% of the source is main text. Read the extracted text to check this.
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.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Dickstein and Morales (2018) What Do Exporters Know? | 0.874 | 6 | 5 | 67% |
| 2 | Murphy and Topel (1985) Least Squares with Estimated Regressors | 0.669 | 10 | 3 | 30% |
| 3 | Cunha, Heckman, and Navarro (2005) Separating Uncertainty from Heterogeneity in Life Cycle Earnings | 0.511 | 2 | 1 | 100% |
| 4 | Cunha and Heckman (2007) Identifying and estimating the distributions of ex post and ex ante returns to schooling | 0.405 | 1 | 1 | 100% |
| 5 | Dynarski (2003) Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion | 0.405 | 1 | 1 | 100% |
| 6 | Jensen (2010) The (Perceived) Returns to Education and the Demand for Schooling | 0.405 | 1 | 1 | 100% |
| 7 | Rivers and Vuong (1988) Limited Information Estimators and Exogeneity Tests for Simultaneous Probit Models | 0.405 | 1 | 1 | 100% |
| 8 | Wiswall and Zafar (2015) How Do College Students Respond to Public Information about Earnings? | 0.405 | 1 | 1 | 100% |
| 9 | Berry, Levinsohn, and Pakes (1995) Automobile Prices in Market Equilibrium | 0.405 | 1 | 1 | 100% |
| 10 | Bleemer and Zafar (2018) Intended College Attendance: Evidence from an Experiment on College Returns and Costs | 0.405 | 1 | 1 | 100% |
Showing the top 10 of 19 scored citations.