Search results

We use spline interpolation to approximate the subjective cumulative distribution function of an economic agent over the future realization of a continuous (possibly censored) random variable. The method proposed exploits information collected using a small number of probability questions on expectations and requires a weak prior knowledge of the shape of the underlying distribution. We find that eliciting 4 or 5 points on the cumulative distribution function of an agent is sufficient to accurately approximate a wide variety of underlying distributions. We show that estimated moments of general functions of the random variable can be computed analytically and/or using standard simulation techniques. We illustrate the usefulness of the method by estimating a simple model to asses the impact of expectations on investment decisions in a commonly used trust game. -- Approximation of subjective expectations ; spline interpolation ; decision making under uncertainty

Quebecers are living longer than ever before as a result of better health as well as improved educational attainment and economic well-being. Using a dynamic microsimulation model, we show that an aging workforce will not necessarily mean a decline in Quebec employment levels in the coming years. Because future experienced workers will be more educated and more of them will remain in employment for longer, we project that annual growth rates in employment will stay positive, averaging between 0.2 and 0.3 percent over the next two decades. Between 2035 and 2050, employment could contribute nearly 0.3 percentage points to annual economic growth in Quebec.