To produce structural estimates,which of the following must be TRUE?

Question

Quizplus · Accepted Answer

Structural estimates require the researcher to observe more information than reduced-form estimates because they involve specifying a functional form for the underlying economic model. This requires detailed data on the preferences and choices of individuals in the population being studied. Assumptions on the functional form of utility can be imposed in structural estimation to simplify the model and ease parameter estimation. While randomized studies can improve the internal validity of an experiment, they are not a necessary requirement for producing structural estimates. Correlation between variables does not necessarily invalidate the use of structural estimation techniques.

To Produce Structural Estimates,which of the Following Must Be TRUE