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.
Country / Region
Date
2025-12-19Cite this publication
Belongs to collection
Author
Rosá, TatianaWei, Siqi
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