Publications
“Identification of Dynamic Discrete Choice Models with Hyperbolic Discounting Using a Terminating Action” with Ruli Xiao and Stefan Weiergraeber (2025 Journal of Business & Economic Statistics, ABS4)
We study the identification of dynamic discrete choice models with hyperbolic discounting using a terminating action. We provide novel identification results for both sophisticated and naive agents’ discount factors and their utilities in a finite horizon framework under the assumption of a stationary flow utility. In contrast to existing identification strategies we do not require to observe the final period for the sophisticated agent. Moreover, we avoid normalizing the flow utility of a reference action for both the sophisticated and the naive agent. We propose two simple estimators and show that they perform well in simulations.
Working Papers
“Understanding Fertility Today: Young Couples’ Expectations about the Consequences of Childbearing” with Kelin Lu
Fertility decisions are forward-looking and made within couples, yet little is known about how young couples perceive the consequences of childbearing. We survey 1,800 respondents from paired Chinese one-child couples and elicit second-birth plans and expectations about life outcomes under alternative fertility choices, including consumption, wages, time burdens, and old-age support. We use these data to estimate a household bargaining model. Wives are more likely than husbands to oppose a second birth. The main driver of this disagreement is not wives’ weak bargaining power, but gender differences in preferences over child quantity. Policy simulations show that public childcare, especially when it also reduces motherhood wage penalties, is more effective than cash transfers. The old-age value of children operates more through support in adverse health states than through financial transfers, but an additional child provides only limited extra insurance. These results show the value of measuring the beliefs and trade-offs that shape fertility decisions among current cohorts.
[“Subsidizing Electric Vehicles among Heterogeneous Consumers: Does Vehicle Holding Matter?”]
In the United States, most households can access one or more vehicles. I study the impact of household vehicle holding on a household’s vehicle purchasing decisions and the benefit of taking into account such an impact on EV subsidy policy. I develop a structural model of household automobile decisions while allowing for the willingness to pay for the new vehicle to vary with the current vehicle holdings. Combining market sales data and survey information in California, I identify and estimate the preference heterogeneity induced by vehicle holding and quantify its welfare implications. Households without vehicles exhibit a higher vehicle purchase propensity, while households with EVs are more likely to acquire additional EVs compared to households with gasoline vehicles. Counterfactual simulations indicate that redistributing subsidy amounts across households with different vehicle holdings could increase EV sales by 8% without augmenting subsidy expenditure, at the cost of a 0.1% reduction in consumer surplus. In contrast, achieving the same level of EV sales under the current subsidy scheme would require an additional $81.6 million in the government’s subsidy budget.
This paper studies identification of quasi-hyperbolic discount dynamic discrete choice models in both finite and infinite horizons, exploring the unique features of the presence of multiple terminating actions. Under economically meaningful exclusion restrictions, the identification of discount factors is characterized by polynomial moment conditions. The presence of multiple terminating actions greatly reduces the complication of the identification and also helps relax the restrictions imposed on the flow utility function. This paper also examines the impact of estimating the `underlying’ hyperbolic discounting model as the prevalent exponential discount model. I find that such misspecification could lead to misleading policy implications.
Work in Progress
“Vintage Models in Demand for Automobiles”
“New Technology, Environmental Impact and Time Preference: Evidence from Electric Vehicle Adoption”