I took a behavioral econ class and learnt the "structural estimation" of risk-aversion parameter.

Later some friends told me that what I learnt is too simple when I was bragging about my term paper in structural estimation. They said structural estimation is much, much more complicated than that.

I understand that behavioral econ is only a small field. I later learnt that structural estimation is also applied in international econ, accounting, corporate finance. I am interested in:

  1. A rigorous methodology paper on structural estimation. Preferable include some prominent example that had a great impact on human history.

If there is no such paper, I am most interested in:

  1. An example structural model whose importance influenced human history (or economic history at least).

Estimating risk-aversion parameter is very impactful I think. I am looking for a historical work that is both not too simple and several order of magnitude more impactful than that. The Roy model on wage and relocation is impactful, but too simple. My criteria of simpleness is that the decision must be determined with two or more factors, not just one. In the Roy model, the worker will relocate if and only if $w_2+\epsilon-C>w_1$: this is a single-factor decision model where the worker only care about money, which is too simple.

Note, guys on AEA has suggested:

  1. Highly recommend this book by Ken Wolpin : https://mitpress.mit.edu/books/limits-inference-without-theory
  • $\begingroup$ how do you define most famous? Highest number of citations? $\endgroup$
    – 1muflon1
    Commented Dec 1, 2023 at 21:31
  • $\begingroup$ @1muflon1 Sure, why not. I think "one" of the most famous work is fine. No need to be that strict $\endgroup$
    – dodo
    Commented Dec 1, 2023 at 21:38
  • $\begingroup$ I don't know if there are famous examples but, if I wanted to find one, I'd probably look at "Structural Macro-Econometrics" by Dejong and a co-author whose name escapes me. $\endgroup$
    – mark leeds
    Commented Dec 4, 2023 at 23:52


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