| Abstract: |
This paper discusses the use of discrete choice dynamic programming (DCDP)
methods for evaluating policies of particular relevance to developing
countries, such as policies to reduce child labor and increase school
attendance, to improve school quality, to affect immigration flows, to expand
old age pension benefits, or to foster small business investment through
microfinance. We describe the DCDP framework and how it relates to static
models, illustrate its application with an example related to conditional cash
transfer programs, consider numerous empirical applications from the
literature of how the DCDP methodology has been used to address substantively
important policy issues, and discuss methods for model validation. |