John Rust

John Rust was born in Wisconsin on May 23, 1955. He graduated from

Waukesha High School in 1973, completed his B.A. in mathematics in 1977 at the

University of Pennsylvania, and received his Ph.D. in economics from

Massachusetts Institute of Technology in 1983.

His dissertation titled “Stationary Equilibrium in a Market for Durable Assets”

under the supervision of Daniel McFadden was published as an Econometrica article in 1985.

{{cite journal

| quote =

| last = Rust

| first = John

| date = 1985

| title = Stationary equilibrium in a market for durable assets

| jstor = 1912654

| journal = Econometrica

| volume = 53

| issue = 4

| pages = 783–805

| bibcode =

| doi = 10.2307/1912654

| url = http://ageconsearch.umn.edu/record/292594/files/uwmad-0014.PDF

}}

After graduating from the University of Pennsylvania in 1977, John

Rust worked as a research analyst for Morgan Stanley in New York City for two years.

His first academic job was at the University of Wisconsin (assistant professor, 1983–1987,

associate professor, 1987–1989, and full professor, 1990–1996), after which he had professorial

positions at Yale University (1996–2001) and University of Maryland (2001–2011) before

starting his current affiliation with Georgetown University.

{{cite web|url= https://editorialexpress.com/jrust/vita.pdf |title=Curriculum vitae }}

John Rust had been affiliated with a number of governmental bodies, including

Board of Governors, Federal Reserve System (research consultant, 1995),

Panel of Expert Reviewers of Social Security Administration’s MINT Model (member, 1998-1999),

Technical Panel of Social Security Advisory Board (member, 1998-1999),

Long Term Modeling Advisory Group U.S. Congressional Budget Office (member, 2001-2004),

Social Security Administration (advisor for demonstration project resulting

from the 1999 Work Incentives Improvement Act, 2000-2003).

He has also been a member of the Steering Committee of the Health and Retirement Study at the

University of Michigan (2000-2002),

senior advisor at The Brattle Group (since 2004) and a

fellow of [https://www.tiaa-crefinstitute.org/public/institute TIAA-CREF Institute, New York] (since 2005).

{{cite web|url= https://editorialexpress.com/jrust/vita.pdf |title=Curriculum vitae }}

{{further|Dynamic discrete choice}}

Rust is best known for developing methods for analyzing dynamic discrete choice. In his best-known paper, he modeled the decision of Harold Zurcher, superintendent of the Madison, Wisconsin Metropolitan Bus Company, whether and when to replace the engines of buses in his fleet, and developed the nested fixed point algorithm to estimate the model using data on when the buses were replaced.{{sfn|Rust|1987}} This paper is one of the first dynamic stochastic models of discrete choice estimated using real data, and continues to serve as classical example of the problems of this type. The methods Rust developed have been used to study dynamic economic decisions in other contexts, including retirement and occupational choice.

Although John Rust is a prominent structural econometrician,

in the ongoing debate

{{cite web

| url= http://www.econjobrumors.com/topic/whats-reduced-form-and-whats-structural-form-estimation

| title= Discussion of structural vs. reduced form approach at EconJobRumers.com anonymous professional forum

| author=

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between adepts of the structural and

non-structural econometric approaches,

he has expressed a balanced position.

{{cite journal

| last = Rust

| first = John

| title = Comments on: "Structural vs. atheoretic approaches to econometrics" by Michael Keane

| journal = Journal of Econometrics

| volume = 156

| issue = 1

| pages = 21–24

| date = 2010

|issn = 0304-4076

| doi = 10.1016/j.jeconom.2009.09.004

}}

I really do not understand the widespread antipathy towards structural econometrics. I do not see any basis for the belief that the reduced form approaches adopted by statistical modelers is more justified or legitimate (or is less subjective) than the structural econometric approach adopted by economic modelers. Both types of modelers have to impose strong assumptions, and it seems all that we can say is that these models and the underlying identifying assumptions are just different.

It really isn’t productive to criticize the status quo in economics these days, nor is it productive to try to promote the virtues of structural estimation. Criticism only encourages the practitioners to rally around the flag. I think it is equally a waste of time to try to engage in salesmanship.

Instead, in his review of "The Limits of Inference without Theory" by Kenneth Wolpin

{{cite book

|year=2013

|last=Wolpin

|first=Kenneth I.

|title=The Limits of Inference without Theory

|series = Tjalling C. Koopmans Memorial Lectures

|jstor = j.ctt5vjpxr

|publisher = The MIT Press

|isbn=9780262019088

}}

titled "The Limits of Inference with Theory"

{{cite journal

| last = Rust

| first = John

| s2cid = 13175008

| title = The Limits of Inference with Theory: A Review of Wolpin (2013)

| journal = Journal of Economic Literature

| volume = 52

| issue = 3

| date = 2014

| pages = 820–50

| doi = 10.1257/jel.52.3.820

}}

John Rust brings attention to the limits of inference inherent to any econometric approach,

and argues that collection of better data and closer cooperation between structural and the

experimental economics will lead to more useful empirical knowledge.

My main message is though there is ample room for getting far more knowledge from limited data (and even more when we have access to “big data” ) by optimally combining inductive and deductive approaches to inference and learning, it is important to recognize that there are a number of inherent limits to inference that may be insuperable. These limits were not adequately addressed in Wolpin’s book, and motivated the title of this review.

John Rust holds a stronger position on the issue of disconnect between theoretical economics and econometrics

from the real world (empirical) problems.

At the "Causality in the Social Sciences Conference" held at Stanford University on December 5–6, 2014

he gave a talk titled

"{{cite web |url= http://www.gsb.stanford.edu/sites/default/files/documents/Rust%20Presentation.pdf |title= Mostly Useless Econometrics: Measuring the Causal Effect of Econometric Theory }}{{Dead link|date=February 2020 |bot=InternetArchiveBot |fix-attempted=yes }}"{{cite web |url= http://www.gsb.stanford.edu/sites/default/files/documents/Rust%20Presentation.pdf |title= Presentation slides }}{{Dead link|date=February 2020 |bot=InternetArchiveBot |fix-attempted=yes }}

where he pointed out that development of complicated econometric theories is rewarded disproportionally

to their practical usefulness.

In 2004 John Rust co-founded the software development company [https://www.technoluddites.com/ Technoluddities, Inc.]

{{cite web

| url= http://www.marylandcorporates.com/corp/350376.html

| title= Maryland Corporates record of Technoluddities, Inc.

| author=

| date=

| website=

| publisher=

| access-date= 22 May 2015

| quote= TECHNOLUDDITES, INC. is a company incorporated in Maryland and its company number is d10129625. TECHNOLUDDITES, INC. was registered on 07/30/2004

}}

which operates several web-based software products widely used by the economic profession.

Technoluddities, Inc. owns trademarks to three of these services, namely Editorial Express,

Conference Maker and Head Hunter.{{cite web

| url= https://inventively.com/search/trademarks/owner/Technoluddites,%20Inc.

| title= Trademarks owned by Technoluddites, Inc.

| author=

| date=

| website=

| publisher=

| access-date= 22 May 2015

| quote=

| archive-date= 4 March 2016

| archive-url= https://web.archive.org/web/20160304110019/https://inventively.com/search/trademarks/owner/Technoluddites,%20Inc.

| url-status= dead

}}

[http://editorialexpress.com/e-editor/ Editorial Express]

is web-based editorial tracking software that can enable

"paper-free" operation of the key editorial functions of a journal.

Some of the features of this system include guaranteed low pricing, secure operations and data

encryption, electronic submission of papers and referee reports, easy assignment of editors and referees, built-in email

notification and automatic reminders, statistical functions and reporting.

{{cite web

| url= http://editorialexpress.com/e-editor/editorial-express.html

| title= About Editorial Express

| author=

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| access-date= 22 May 2015

| quote=

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Editorial express is regarded by many as one of the best journal management systems.

{{cite web

| url= http://www.mcafee.cc/Bin/MC.html

| title= Manuscript Central Software Review

| author= Preston McAfee

| date= May 2009

| website=

| publisher=

| access-date= 22 May 2015

| quote= An editor asked me for my thoughts on Blackwell-Wiley's Manuscript Central, so I decided to put my thoughts out for everyone to see. I've used three programs to edit journals: Editorial Assistant, Editorial Express and Manuscript Central. I like Editorial Express the best, by a good margin.

}}

Editorial Express used by many leading journals in economics including

Econometrica,

Quarterly Journal of Economics,

RAND Journal of Economics,

Review of Economic Studies

Journal of Applied Econometrics,

International Economic Review,

Review of Economics and Statistics,

Journal of Finance and other.

{{cite web

| url= http://editorialexpress.com/e-editor/

| title= Journals using Editorial Express

| author=

| date=

| website=

| publisher=

| access-date= 22 May 2015

| quote=

}}

[https://editorialexpress.com/cgi-bin/conference/listconfs.cgi Conference Maker]

is web-based software for organizing international conferences.

Conference Maker allows a program chair (or several co-chairs) and their selected program committee

to handle the submission process in a decentralized fashion. All members of the program committee can

log in at any time via secure password protected accounts and can view all submissions online.

Program committee members are assigned certain subsets of submissions (usually designated by the person making the submission, unless overwritten by program committee members) and can make accept/reject decisions by clicking a button.

There is also a simple interface for forming sessions, searching for discussants and session chairs,

posting/updating the conference program to an automatically generated web page,

and sending mass emails to arbitrarily selected subgroups of users.

Over 625 international conferences have used Conference Maker since it was introduced in 2001,

more than 150,000 submissions have been made to Conference Maker for these various

conferences and over 290,000 people worldwide have used it.

{{cite web

| url= http://editorialexpress.com/conference/confmaker.html

| title= About Conference Maker

| author=

| date=

| website=

| publisher=

| access-date= 22 May 2015

| quote=

}}

[https://editorialexpress.com/cgi-bin/conference/listconfs.cgi Head Hunter]

is web-based academic recruiting software specially designed as a "back end interface" to the

[https://econjobmarket.org EconJobMarket.org].

Some of the features of this system include paperless operation, built-in scheduling module,

easy setup, high security, electronic applications and reference letters.

{{cite web

| url= https://editorialexpress.com/hh/hh_info.html

| title= About Head Hunter

| author=

| date=

| website=

| publisher=

| access-date= 22 May 2015

| quote=

}}

Head Hunter is one of the internal interfaces (or "back ends") which facilitate the

departments the work with the applications and reference letters collected by

EconJobMarket.org centralized application collection system.

[https://econjobmarket.org/ EconJobMarket.org] (EJM)

is a nonprofit organization that facilitates the flow of information in the economics

job market by providing a secure central repository for the files of job-market candidates

(including papers, reference letters, and other materials) accessed on line.

EJM was founded in 2007 by Martin Osborne, John Rust, and Joel Watson, and is

run by a group of academic economists who volunteer their time and effort.{{cite web

| url= https://econjobmarket.org/organization.php

| archive-url= https://web.archive.org/web/20120304201138/https://econjobmarket.org/organization.php

| url-status= dead

| archive-date= March 4, 2012

| title= EconJobMarket organizational structure

| author=

| date=

| website=

| publisher=

| access-date= 22 May 2015

| quote=

}}

EconJobMarket.org is endorsed by

The Econometric Society,

Canadian Economics Association,

European Economic Association,

[http://www.ebesweb.org/ Eurasia Business and Economics Society],

Society for Economic Dynamics,

[http://www.socialpolitik.de/En Verein für Socialpolitik],

[https://web.archive.org/web/20090921170932/http://www.voxeu.org/ VOX] and

[http://www.walras.org/ walras.org]

The theoretical foundation for the creation of EconJobMarket.org

is described in Chapter 7 of The Handbook of Market Design.

{{cite book

|year=2013

|editor1-last=Vulkan

|editor1-first=Nir

|editor2-last=Roth

|editor2-first=Alvin E

|editor3-last=Neeman

|editor3-first=Zvika

|title=The handbook of market design

|url=https://books.google.com/books?id=PTppAgAAQBAJ

|publisher=OUP Oxford

|isbn=9780191668432

}}

EJM does not attempt to fundamentally alter the decentralized “endogenous search and matching” process by which the economics job market currently operates. Since there is unrestricted entry of intermediaries similar to EJM and a number of for-profit and non-profit organizations are currently competing in this market, we discuss the problem of market fragmentation that can occur when too many organizations attempt to intermediate trade in the market. Contrary to conventional wisdom in industrial organization theory, we show that unrestricted entry and competition of intermediaries can result in suboptimal outcomes. We discuss conditions under which the market might be improved if there is sufficient coordination to promote information sharing, such as establishing a dominant information clearinghouse that operates as a non-profit public service — a role EJM is trying to fulfill.{{cite book

|last1=Bandyopadhyay

|first1=Sarbartha

|last2=Iskhakov

|first2=Fedor

|last3=Johnson

|first3=Terence

|last4=Lee

|first4=Soohyung

|last5=McArthur

|first5=David

|last6=Rust

|first6=John

|last7=Watson

|first7=Joel

|last8=Watson

|first8=John

|year=2013

|editor1-last=Vulkan

|editor1-first=Nir

|editor2-last=Roth

|editor2-first=Alvin E

|editor3-last=Neeman

|editor3-first=Zvika

|chapter=Can the Job Market for Economists Be Imptoved?

|title=The handbook of market design

|chapter-url=https://books.google.com/books?id=PTppAgAAQBAJ

|publisher=OUP Oxford

|isbn=9780191668432

}}

EconJobMarket.org grew in various significant characteristics

(number of job adds posted, number of recruiters' accounts, number of applicants' accounts,

number of applications transmitted, number of recommenders' accounts, number of recommendations transmitted)

between its inception and 2011 at an average annual rate between 79% and 194%.

• {{cite journal

| last = Rust

| first = John

| s2cid = 154722645

| title = Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher

| journal = Econometrica

| volume = 55

| issue = 5

| pages = 999–1033

|issn = 0012-9682

| date = 1987

|jstor = 1911259

| doi=10.2307/1911259

}}

• {{cite journal

| last = Rust

| first = John

| title = Maximum likelihood estimation of discrete control processes

| journal = SIAM Journal on Control and Optimization

| volume = 26

| issue = 5

| pages = 1006–1024

| date = 1988

| doi = 10.1137/0326056

| url = http://ageconsearch.umn.edu/record/292600/files/uwmad-0020.PDF

}}

• {{cite book

| last = Rust

| first = John

| chapter = Structural estimation of Markov decision processes

| title = Handbook of Econometrics, Vol. 4

| journal = Econometric Theory

| editor1-last=Engle

| editor1-first=R.F.

| editor2-last=McFadden

| editor2-first=D.L.

| pages = 3081–3143

| publisher = Elsevier Science B.V.

| volume = chap. 51

| date = 1994

| doi = 10.1017/S0266466600005661

| s2cid = 119730221

}}

• {{cite journal

| last1 = Kapteyn

| first1 = Arie

| last2 = Kieffer

| first2 = Nicholas

| last3 = Rust

| first3 = John

| title = The microeconometrics of dynamic decision making

| journal = Journal of Applied Econometrics

| volume = 10

| issue = S1

| pages = S1–S7

| date = 1995

| doi = 10.1002/jae.3950100502

}}

• {{cite journal

| last = Rust

| first = John

| title = Using Randomization to Break the Curse of Dimensionality

| journal = Econometrica

| volume = 65

| issue = 3

| pages = 487–516

|issn = 0012-9682

| date = 1997

| jstor = 2171751

| doi = 10.2307/2171751

| citeseerx= 10.1.1.198.7218

| s2cid = 14931834

}}

• {{cite journal

| last1 = Rust

| first1 = John

| last2 = Traub

| first2 = J. F.

| last3 = Wozniakowski

| first3 = H.

| title = Is There a Curse of Dimensionality for Contraction Fixed Points in the Worst Case?

| journal = Econometrica

| volume = 70

| issue = 1

| issn = 1468-0262

| pages = 285–329

| date = 2002

| jstor = 2692170

| doi = 10.1111/1468-0262.00276

| citeseerx = 10.1.1.20.7714

}}

• {{cite journal

| last1 = Santos

| first1 = Manuel S

| last2 = Rust

| first2 = John

| s2cid = 6989026

| title = Convergence properties of policy iteration

| journal = SIAM Journal on Control and Optimization

| volume = 42

| issue = 6

| pages = 2094–2115

| date = 2004

| doi = 10.1137/S0363012902399824

}}

• {{cite journal

| last1 = Paarsch

| first1 = Harry J.

| last2 = Rust

| first2 = John

| title = Valuing programs with deterministic and stochastic cycles

| journal = Journal of Economic Dynamics and Control

| volume = 33

| issue = 3

| pages = 614–623

| date = 2009

| issn = 0165-1889

| doi = 10.1016/j.jedc.2008.08.007

}}

• {{cite journal

| last1 = Gillingham

| first1 = Kenneth

| last2 = Iskhakov

| first2 = Fedor

| last3 = Munk-Nielsen

| first3 = Anders

| last4 = Rust

| first4 = John

| last5 = Schjerning

| first5 = Bertel

| title = Equilibrium trade in automobiles

| journal = Journal of Political Economy

| volume = 130

| issue = 10

| pages = 2534–2593

| date = 2022

| doi = 10.1086/720463

}}

• {{cite journal

| last = Rust

| first = John

| date = 1985

| title = Stationary equilibrium in a market for durable assets

| journal = Econometrica

| volume = 53

| issue = 4

| pages = 783–805

| doi = 10.2307/1912654

| jstor = 1912654

| url = http://ageconsearch.umn.edu/record/292594/files/uwmad-0014.PDF

}}

• {{cite journal

| last = Rust

| first = John

| title = When is it optimal to kill off the market for used durable goods?

| journal = Econometrica

| volume = 54

| issue = 1

| pages = 65–86

| date = 1986

| jstor = 1914157

| doi = 10.2307/1914157

}}

• {{cite journal

| last1 = Rust

| first1 = John

| last2 = Hall

| first2 = George

| title = Middlemen versus Market Makers: A Theory of Competitive Exchange

| journal = Journal of Political Economy

| volume = 111

| issue = 2

| pages = 353–403

| date = 2003

| jstor = 10.1086/367684

| doi = 10.1086/367684

| s2cid = 1266044

| url = http://www.nber.org/papers/w8883.pdf

}}

• {{cite book

| last = Rust

| first = John

| chapter = A dynamic programming model of retirement behavior

| title = The economics of aging

| editor-last=Wise

| editor-first=David

| pages = 359–404

| date = 1989

| isbn = 9780226903224

| chapter-url = https://books.google.com/books?id=XI_VRVyhN_kC

| publisher = University of Chicago Press

}}

• {{cite journal

| last1 = Rust

| first1 = John

| last2 = Phelan

| first2 = Christopher

| title = How Social Security and Medicare Affect Retirement Behavior In a World of Incomplete Markets

| journal = Econometrica

| volume = 65

| issue = 4

| pages = 781–831

| issn = 0012-9682

| date = 1997

| jstor = 2171940

| doi = 10.2307/2171940

| citeseerx = 10.1.1.369.9071

}}

• {{cite journal

| last1 = Benítez-Silva

| first1 = Hugo

| last2 = Buchinsky

| first2 = Moshe

| last3 = Chan

| first3 = Hiu Man

| last4 = Rust

| first4 = John

| last5 = Sheidvasser

| first5 = Sofia

| title = An empirical analysis of the social security disability application, appeal, and award process

| journal = Labour Economics

| volume = 6

| issue = 2

| pages = 147–178

| date = 1999

| doi = 10.1016/s0927-5371(99)00014-7

| doi-access= free

}}

• {{cite journal

| last1 = Benítez-Silva

| first1 = Hugo

| last2 = Buchinsky

| first2 = Moshe

| last3 = Chan

| first3 = Hiu Man

| last4 = Sheidvasser

| first4 = Sofia

| last5 = Rust

| first5 = John

| title = How Large Is the Bias in Self-Reported Disability?

| journal = Journal of Applied Econometrics

| volume = 19

| issue = 6

| pages = 649–670

| date = 2004

| jstor = 25146315

| doi = 10.1002/jae.797

| s2cid = 145237824

| url = http://papers.nber.org/papers/w7526.pdf

}}

• {{cite journal

| last1 = Cho

| first1 = Sungjin

| last2 = Rust

| first2 = John

| title = Is econometrics useful for private policy making? A case study of replacement policy at an auto rental company

| journal = Journal of Econometrics

| date = 2008

| volume = 145

| issue = 1–2

| pages = 243–257

| url = https://ideas.repec.org/a/eee/econom/v145y2008i1-2p243-257.html

| doi = 10.1016/j.jeconom.2008.05.015

| citeseerx = 10.1.1.134.390

| s2cid = 54996763

}}

• {{cite journal

| last1 = Cho

| first1 = Sungjin

| last2 = Rust

| first2 = John

| s2cid = 53127266

| title = The Flat Rental Puzzle

| journal = The Review of Economic Studies

| volume = 77

| issue = 2

| pages = 560–594

| issn = 0034-6527

| date = 2010

| jstor = 40587639

| doi = 10.1111/j.1467-937x.2009.00556.x

| doi-access=

}}

• {{cite journal

| last1 = Rust

| first1 = John

| last2 = Rothwell

| first2 = Geoffrey

| title = Optimal Response to a Shift in Regulatory Regime: The Case of the US Nuclear Power Industry

| journal = Journal of Applied Econometrics

| volume = 10

| issue = Special Issue: The Microeconometrics of Dynamic Decision Making

| pages = S75–S118

| date = 1995

| jstor = 2285015

| doi = 10.1002/jae.3950100506

| citeseerx = 10.1.1.203.2601

}}

• {{cite journal

| last1 = Rothwell

| first1 = Geoffrey

| last2 = Rust

| first2 = John

| s2cid = 14334833

| title = On the Optimal Lifetime of Nuclear Power Plants

| journal = Journal of Business & Economic Statistics

| volume = 15

| issue = 2

| pages = 195–208

| date = 1997

| jstor = 1392305

| doi = 10.1080/07350015.1997.10524700

}}

• {{cite journal

| last = Rust

| first = John

| title = Comments on: "Structural vs. atheoretic approaches to econometrics" by Michael Keane

| journal = Journal of Econometrics

| volume = 156

| issue = 1

| pages = 21–24

| date = 2010

| issn = 0304-4076

| doi = 10.1016/j.jeconom.2009.09.004

}}

• {{cite journal

| last = Rust

| first = John

| s2cid = 13175008

| title = The Limits of Inference with Theory: A Review of Wolpin (2013)

| journal = Journal of Economic Literature

| volume = 52

| issue = 3

| date = 2014

| pages = 820–50

| doi = 10.1257/jel.52.3.820

}}

• {{cite book

|last1=Friedman

|first1=Daniel

|last2=Rust

|first2=John

|year=1993

|volume=14

|title=The double auction market: institutions, theories, and evidence

|publisher=Westview Press

}}

• {{cite book

|last1=Amman

|first1=Hans M

|last2=Tesfatsion

|first2=Leigh

|last3=Judd

|first3=Kenneth L

|last4=Kendrick

|first4=David A

|last5=Rust

|first5=John

|year=2006

|title=Handbook of computational economics

|publisher=Elsevier

|url=https://books.google.com/books?id=4-gvPEwxR-AC

|isbn=9780444512536

}}

• List of economists

{{Reflist|colwidth=30em}}

• [https://editorialexpress.com/jrust/ John Rust personal webpage]
• [https://ideas.repec.org/e/pru5.html John Rust at IDEAS.RePeC.org]
• [https://editorialexpress.com/jrust/nfxp.html NFXP software and manual]
• [https://www.technoluddites.com/ Technoluddities, Inc.]
• [http://editorialexpress.com/e-editor/ Editorial Express]
• [https://editorialexpress.com/cgi-bin/conference/listconfs.cgi Conference Maker]
• [https://editorialexpress.com/cgi-bin/conference/listconfs.cgi Head Hunter]
• [https://econjobmarket.org/ EconJobMarket.org]

{{Frisch Medal recipients}}

{{Authority control}}

{{DEFAULTSORT:Rust, John Philip}}

Category:Living people

Category:1955 births

Category:American econometricians

Category:Fellows of the Econometric Society

Category:Massachusetts Institute of Technology alumni

Category:University of Wisconsin–Madison faculty

Category:Yale University faculty

Category:University of Maryland, College Park faculty

Category:Georgetown University faculty

Category:20th-century American economists

Category:21st-century American economists

Category:University of Michigan people