How could we not talk about Harold Zurcher in this course!
First things first: Who was Harold Zurcher?
In 2020 the world lost Harold Zurcher (Zuercher), dedicated employee of the Madison Metro Bus Co and celebrity to generations of econ PhD students. #EconTwitter— Frank Pinter (@frank_pinter) December 29, 2020
That's right. Generations of Econ PhD students. Harold Zurcher even has a parody account on twitter. Why the fame? Well he was the leading actor in John Rust's groundbreaking paper on Bus Engine Replacement. Much of what we do nowadays in structural micro econometrics can be traced back to that paper. Even I have a paper on the Bus Engine Replacement Model!
In this very easy homework, I will outsource you to the phantastic video material of Fedor Iskhakov. Fedor is among the world's leading experts of that model class - amongst other things - and therefore (trying to) redo what he did in his course is just pointless. We will next time in class implement the numerical solution in julia. Be sure to check out all the other great stuff that Fedor does in his course.
So, what's to do?
Watch the 45 minute video of Fedor here. It's full of relevant info beyond the Rust model at hand.
Watch out! The video is spiked with simple questions to make sure you get the main ideas.