Unified Method for Markov Chain Transition Model Estimation Using Incomplete Survey Data
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The Future Elderly Model and related microsimulations are modeled as Markov chains. These simulations rely on longitudinal survey data to estimate their transition models. The use of survey data presents several incomplete data problems, including coarse and irregular spacing of interviews, data collection from subsamples, and structural changes to surveys over time. The Expectation-Maximization algorithm is adapted to create a method for maximum likelihood estimation of Markov chain transition models using incomplete data. The method is demonstrated on a simplified version of the Future Elderly Model.
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