A nonparametric Bayesian approach for counterfactual prediction with an application to the Japanese private nursing home market

Sugawara, Shinya (2012): A nonparametric Bayesian approach for counterfactual prediction with an application to the Japanese private nursing home market.

Abstract

This paper proposes a new inferential framework for structural econometric models using a nonparametric Bayesian approach. Although estimation methods based on moment conditions can employ a flexible estimation without distributional assumptions, they have difficulty conducting a prediction analysis. I propose a nonparametric Bayesian methodology for an estimation and prediction analysis. My methodology is applied to an empirical analysis of the Japanese private nursing home market. This market has a sticky economic circumstance, and my prediction simulates an intervention that removes this circumstance. The prediction result implies that the outdated circumstance in this market is harmful for consumers today.

• Item Type: MPRA Paper
• Language: English
• Keywords: Nonparametric Bayes; Nonlinear simultaneous equation model; Prediction; Industrial organization; Nursing home; Long-term care in Japan
• Subjects: J - Labor and Demographic Economics > J1 - Demographic Economics > J14 - Economics of the Elderly ; Economics of the Handicapped ; Non-Labor Market Discrimination; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C11 - Bayesian Analysis: General

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