This paper provides a step-by-step guide to estimating infinite horizon discrete choice dynamic programming (DDP) models using a new Bayesian estimation algorithm (Imai, Jain and Ching, Econometrica 77:1865-1899, 2009) (IJC). In the conventional nested fixed point algorithm, most of the...

We propose a new methodology for estimating demand and cost functions of differentiated products models when demand and cost data are available. The method deals with the endogeneity of prices to demand shocks and the endogeneity of outputs to cost shocks by using cost data. We establish...

This paper asks whether the results obtained from using the standard approach to testing the influential Grossman and Helpman %u201Cprotection for sale (PFS)%u201D model of political economy might arise from a simpler setting. A model of imports and quotas with protection occurring in response...

This paper proposes a new test of the Protection for Sale (PFS) model by Grossman and Helpman (1994). Unlike existing methods in the literature, our approach does not require any data on political organization. We use quantile and quantile IV regressions to do so using the data from Gawande and...