Dynamic Optimization in Models for State Panel Data: A Cohort Panel Data Model of the Effects of Divorce Laws on Divorce Rates

44 Pages Posted: 2 Feb 2013

Date Written: June 14, 2011

Abstract

We present a new approach to the estimation of dynamic models using panel data, not on individuals, but aggregated to some level such as the school, county or state. This approach embeds the reduced form implications of dynamic optimization for exiting a chosen state (via divorce, dropping out, employment, etc.) into a model suitable for estimation with state panel data or similar aggregates (county, SMSA, etc.). With forward looking behaviors, exogenous changes in laws or rules give rise to selection effects on those considering entry and surprise effects for those who have already entered. The application to the effects of divorce laws on divorce rates.

Keywords: marriage and divorce, divorce laws, Coase Theorem, state panel data, dynamic models

Suggested Citation

Iyavarakul, Tongyai and McElroy, Marjorie B. and Staub, Kalina, Dynamic Optimization in Models for State Panel Data: A Cohort Panel Data Model of the Effects of Divorce Laws on Divorce Rates (June 14, 2011). Economic Research Initiatives at Duke (ERID) Working Paper No. 140, Available at SSRN: https://ssrn.com/abstract=2210408

Tongyai Iyavarakul

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Marjorie B. McElroy (Contact Author)

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Kalina Staub

Independent ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
89
Abstract Views
742
Rank
423,427
PlumX Metrics