Artuc, Erhan2013-09-262013-09-262013-06https://hdl.handle.net/10986/15841This paper introduces a computationally efficient method for estimating structural parameters of dynamic discrete choice models with large choice sets. The method is based on Poisson pseudo maximum likelihood (PPML) regression, which is widely used in the international trade and migration literature to estimate the gravity equation. Unlike most of the existing methods in the literature, it does not require strong parametric assumptions on agents' expectations, thus it can accommodate macroeconomic and policy shocks. The regression requires count data as opposed to choice probabilities; therefore it can handle sparse decision transition matrices caused by small sample sizes. As an example application, the paper estimates sectoral worker mobility in the United States.en-USCC BY 3.0 IGOAGRICULTUREASYMPTOTICALLY EQUIVALENTBENCHMARKCALIBRATIONCOEFFICIENTSCONSISTENT ESTIMATESCONSUMER PRICE INDEXCUMULATIVE DISTRIBUTION FUNCTIONDECISION MAKINGDEPENDENT VARIABLEDESCRIPTIVE STATISTICSDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDEVELOPMENT RESEARCHDISCOUNT RATEDISTRIBUTIONAL ASSUMPTIONSDYNAMIC MODELSECONOMETRICSECONOMICS LITERATUREECONOMICS RESEARCHEQUATIONSERRORESTIMATORSEXPECTED VALUEEXPECTED VALUESFIXED EFFECTSINSTRUMENTAL VARIABLESINTERNATIONAL TRADEJOURNAL OF ECONOMETRICSLARGE NUMBERLIKELIHOOD FUNCTIONLINEAR REGRESSIONLINEAR TIMELOGARITHMSLOGIT ANALYSISMACROECONOMIC SHOCKSMARGINAL PRODUCTSMATRICESMATRIXMAXIMUM LIKELIHOODMAXIMUM LIKELIHOOD ESTIMATIONMODELINGMONTE CARLO SIMULATIONNUMBER OF OBSERVATIONSNUMBER OF PARAMETERSOPEN ECONOMYORTHOGONALITYPANEL DATAPERIOD TPRECISIONPROBABILITIESPROBABILITYPROBABILITY DENSITYPROBABILITY DENSITY FUNCTIONPRODUCTION FUNCTIONPRODUCTION FUNCTIONSREGRESSION ANALYSISREGRESSION EQUATIONREGRESSION EQUATIONSRESEARCH WORKING PAPERSRISK NEUTRALSAMPLE SIZESCENARIOSSIMULATIONSIMULATIONSSMALL SAMPLESTANDARD DEVIATIONSTANDARD ERRORSSTATIONARY PROCESSESSTRUCTURAL ANALYSISSTRUCTURAL PARAMETERSTIME PERIODTIME SERIESTIME TRENDSTRADE POLICYUTILITY FUNCTIONWAGESWEIGHTINGPoisson pseudo maximum likelihoodlabor mobilitymigrationdiscrete choice modelsgravity equationWorld Bank10.1596/1813-9450-6480