Dynamic Behavioral Model of Job Search

Dynamic programming project

This project follows the paper "Reference-Dependent Job Search: Evidence From Hungary" by DellaVigna, Lindner, Reizer, and Schmieder (2017).

Included files

1 HTM and ConSav: This notebook compares simulations of the hand-to-mouth and consumption-saving model for a given set of model parameters.
1 VFI and EGM: This notebook compares simulations of the consumption-savings model using either value function iteration or EGM.
2 Estiation - ConSav: This notebook estimates the consumption-savings model and plots relevant figures.
2 Estimation - HtM: This notebook estimates the HtM model and plots relevant figures.
estimation.py: This file contains the script used for estimating the models.
Funcs.py: This file contains relevant functions, i.e. the utility function, cost function, and their derivatives.
Model.py: This file sets up the model class. NB! Uses EconModel class.
solve_consumption_savings.py: This file contains the functions used to solve the consumption-savings model.
solve_hand_to_mouth.py: This file contains the functions used to solve the HtM model.

Running the model requires standard python packages. Further requirements to run model:

Besides standard python packages one needs to install the EconModel class. This can be done by running %pip install EconModel from the terminal