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PSLmodels / InverseOptimalTax

Inverse optimal taxation model
https://pslmodels.github.io/InverseOptimalTax/
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Calculations of derivatives #11

Closed jdebacker closed 10 months ago

jdebacker commented 2 years ago

@john-p-ryan points out that we currently calculate derivatives using differences between discrete bins. However, one could have a more accurate approximation of the derivatives when using splines to approximate the distribution. We should test this alternative method and go with it if it proves more robust.

jdebacker commented 2 years ago

@john-p-ryan I think you looked into this and we decided to go with using the differences between bins. Is that right? Can you explain the reasoning here for future reference?

jdebacker commented 10 months ago

This issue has been resolved with PR #22, which (1) uses theoretical derivatives when possible and (2) finds that finite differences are quite accurate in our context in the cases they are used.