dcegm.asset_correction

Functions

adjust_observed_assets(observed_states_dict, params, ...)

Correct observed beginning of period assets data for likelihood estimation.

Module Contents

dcegm.asset_correction.adjust_observed_assets(observed_states_dict, params, model_class, aux_outs=False)

Correct observed beginning of period assets data for likelihood estimation.

Assets in empirical survey data is observed without the income of last period’s choice.

In the dcegm framework, however, individuals make their consumption decision given the income of the previous period. Therefore, agents in the model have higher beginning of assets wealth than the observed wealth in survey data.

This function can be used to align these two wealth definitions; especially in likelihood estimation, where the computation of choice probabilities requires the correct beginning of period wealth.