Uncovering Hidden Factors Shaping Economic Choices: A Game Changer for Policy?
The article discusses how to identify and estimate complex models for panel data with hidden factors. By using a special method, the researchers can figure out these models without needing to know the exact starting conditions. They focus on models that involve choices and limits changing over time. Through computer simulations, they show that their method works well in practice. As an example, they apply their technique to study how women's work patterns change over time.