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A Sparse Grid Approach for the Nonparametric Estimation of High-Dimensional Random Coefficient Models

Maximilian Osterhaus

arXiv 13 Aug 2024 · Econometrics

arXiv:2408.07185 · PDF · DOI · OpenAlex · Extracted main text

Abstract

A severe limitation of many nonparametric estimators for random coefficient models is the exponential increase of the number of parameters in the number of random coefficients included into the model. This property, known as the curse of dimensionality, restricts the application of such estimators to models with moderately few random coefficients. This paper proposes a scalable nonparametric estimator for high-dimensional random coefficient models. The estimator uses a truncated tensor product of one-dimensional hierarchical basis functions to approximate the underlying random coefficients' distribution. Due to the truncation, the number of parameters increases at a much slower rate than in the regular tensor product basis, rendering the nonparametric estimation of high-dimensional random coefficient models feasible. The derived estimator allows estimating the underlying distribution with constrained least squares, making the approach computationally simple and fast. Monte Carlo experiments and an application to data on the regulation of air pollution illustrate the good performance of the estimator.

Citation extraction

29
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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
1fox2011 APACrefauthors Fox, J T. , Kim, K. , Ryan, S. \ Bajari, P. A… (2011) 20111.000216100%
2bungartz2004 APACrefauthors Bungartz, H J. \ Griebel, M. APACrefauth… (2004) 20041.000104100%
3pflueger2010 APACrefauthors Pflüger, D M. APACrefauthors \ (2010) 2010. \1.000103100%
4train2016 APACrefauthors Train, K. APACrefauthors \ (2016) 20161.00063100%
5chen2007 APACrefauthors Chen, X. APACrefauthors \ (2007) 20070.92843100%
6heiss2021 APACrefauthors Heiss, F. , Hetzenecker, S. \ Osterhaus, M.… (2021) 20210.92843100%
7blundell2020 APACrefauthors Blundell, W. , Gowrisankaran, G. \ Lange… (2020) 202080.87462100%
8brumm2017 APACrefauthors Brumm, J. \ Scheidegger, S. APACrefauthors \ 20170.84333100%
9pflueger2010_2 APACrefauthors Pflüger, D. , Peherstorfer, B. \ Bunga… (2009) 20100.84333100%
10bungartz2014 APACrefauthors Peherstorfer, B. , Pflüge, D. \ Bungartz… (2014) 20140.64422100%

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