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    Estimating Choice Models with Piecewise Smooth Objective Functions: Application to Joint Retirement

    Abstract
    We study choice models with piecewise smooth objective functions and provide conditions under which introducing latent variables derived from regional components yields a censoredmodel– like representation. These latent variables can then be treated as potential outcomes, enabling tractable estimation via the stochastic EM algorithm. We illustrate the framework using two examples: responses to taxes and the (S, s) model. We further estimate a joint retirement decision model for European couples using an interdependent duration framework with our methods. The results provide empirical evidence of complementarities between spouses in the retirement process in Europe.
    Subject
    Investigación socioeconómica | Ciencia conductual
     
    Country / Region
    Europa
    URI
    https://scioteca.caf.com/handle/123456789/2570
    Date
    2025-12-19
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    • 6.1 Documentos de trabajo en investigación socioeconómica
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    Estimating choice models with piecewise smooth objective functions. Application to joint retirement.pdf (2.510Mb)
    Author
    Rosá, Tatiana
    Wei, Siqi
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