ufun_Atta_disc: CRRA Utility function with discrete labor supply and housing

In floswald/ArmaUtils: Rcpp Helper Functions

Description

Calculates CRRA utility from u(Resources, hsize, labour, params )

Usage

ufun_Atta_disc(Resources, hsize, labour, params)

Arguments

Resources	a numeric matrix
labour	vector of length nrow(Resources) of discrete amounts of labour supplied
hsize	either a scalar or a vector of length nrow(Resources) of current house size
params	list of scalar parameters: theta: elasticity of substitution c,h alpha: utility weight of labour gamma: coefficient of relative risk aversion phival: fraction of house-utility derived from flat mu: ownership premium cutoff: minimal consumption level c*. quadratic approximation for c<c*

Details

computes augmented CRRA utility of u(c,l,h,params).

u(c,l,h) = (c * exp(alpha * l) )^1-gamma / (1-gamma) * exp( theta * phi(h) ) + mu * phi(h), phi(h) = 0 if h=0, phi(h) = phival if h=1, phi(h) = 1 if h=2

Computes a quadratic approximation to u() for values of consumption such that c < c*, where c* > 0. Resoures can be a scalar, a vector or a matrix. Utility is computed on all elements. Some care needs to be taken when supplying a matrix of consumption values: the corresponding vector of house sizes needs to be either a scalar (same house size at all cons values) or of length nrow(Resources)

Value

Numeric Matrix of Utility values.

Author(s)

<[e-mail]>

References

Utility functions in

Low, Meghir, Pistaferri, "Wage Risk and Employment Risk over the Life Cycle", American Economic Review, 2010 and

Attanasio, Bottazzi, Low, Nesheim, Wakefield, "Modelling the Demand for Housing over the Lifecycle", Review of Economic Dynamics, 2012

Examples

pars <- list(alpha=0.3,gamma=1.4,cutoff=0.1,mu=0.9,theta=0.3,phival=0.8)
Res  <- outer(1:4,5:-1)	# consumption
lab <- c(0,1,0,1)	# discrete labor supply choices
s <- c(0,0,1,2)	# house sizes
ufun_Atta_disc(Res,s,lab,pars)

floswald/ArmaUtils documentation built on May 16, 2019, 1:23 p.m.