6 votes

Is this an an endogeneity/simultaneity problem?

Let us consider Situation 1. Let us assume that $\rho$ is observed. If it does not work when $\rho$ is observed, there is no reason why it (using a proxy of $\rho$ as instrument) should work when $\...
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  • 2,039
5 votes

Are simultaneous equation models out of fashion? Why?

I think this is already answered in the paper itself and in addition I think this is due to the way how they define 'simultaneous equations' topics. First as authors of that paper opine: This ...
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  • 43.4k
4 votes

Is it possible to get a demand function as function of income and utility from this log linear indirect utility?

First of all, I do not really understand how $$v=-c\frac{p^{(-β+1)}}{(-\beta+1)}+\frac{y^{(-\gamma+1)}}{(-\gamma+1)},$$ can be an indirect utility function since it is a function of $c$ and the ...
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  • 3,176
3 votes

How to estimate $\gamma$ in the following model?

If $u$ is normally distributed conditional on $x$ and $Q$, then you could estimate through probit the second equation. Because $Q$ depends on $e$, and $e$ is correlated with $u$, this assumption ...
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1 vote

Equilibrium with substitute goods

Let's start by writing down the profit functions: $$ \pi_1 = p_1 q_1 - c_1 q_1 = (p_1 - c_1) q_1 = (p_1 - c_1)(a_1 + b_{11} p_1+b_{12} p_2) $$ and similarlily: $$ \pi_2 = (p_2 - c_2)(a_2 + b_{21} p_1 +...
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  • 8,642

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