AI and Economics Workshop

Summary

Workshop exploring how AI can advance economic and social science research. Our primary focus will be AI for economic research, but we may also address some of the economic and social impacts of AI.

Abstract

We develop a flexible neural demand system for continuous budget allocation that estimates budget shares on the simplex by minimizing KL divergence. Shares are produced via a softmax of a state-dependent preference scorer and disciplined with regularity penalties (monotonicity, Slutsky symmetry) to support coherent comparative statics and welfare without imposing a parametric utility form. State dependence enters through a habit stock defined as an exponentially weighted moving average of past consumption; because the habit decay parameter is often weakly identified, we use a profile criterion to report elasticities and compensating-variation conclusions over an identified set, with near-integrability diagnostics. Simulations recover elasticities and welfare accurately and show sizable gains when habit formation is present. In our empirical application using Dominick’s analgesics data, adding habit reduces out-of-sample error by ~33%, reshapes substitution patterns, and increases CV losses from a 10% ibuprofen price rise by about 15–16% relative to a static model.

Marta Grześkiewicz

/ˈmɑːtə ɡrɛskɛvɪtʃ/\

I am a researcher at the intersection of economics and machine learning / AI.