Many interesting estimation problems in econometrics involve the identification of a function g from the functional equation A(g,F)=0, given data on the distribution of observables F. Since F is typically estimated from its empirical counterpart, the key to the problems lies in the existence and properties of the inverse of A. Estimation of g is thus intimately related to the inverse problem of the original relationship. Important examples include: estimation of consumers’ surplus; a valuation distribution in structural auction models; and a nonparametric function in a simultaneous equations model.
Professor Florens is a world-leading expert in the area of estimation of parameters in the inverse problems. During this masterclass, he will introduce many exciting examples of the inverse problems and will demonstrate how the apparently diverse estimation problems can be approached in a unifying way.