John Philip Rust (born May 23, 1955) is an American economist and econometrician. John Rust received his PhD from MIT in 1983 and taught at the University of Wisconsin, Yale University and University of Maryland before joining Georgetown University in 2012. John Rust was awarded Frisch Medal in 1992 and became the fellow of Econometric Society in 1993.
John Rust is best known as one of the founding fathers of the
structural estimation of dynamic discrete choice
models
and the developer of the nested fixed point (NFXP) maximum likelihood estimator which is widely used in structural econometrics. However, he had published papers on broad range of topics including equilibrium in the markets of durable goods, social security, retirement, disability insurance, nuclear power industry, real estate economics, rental car industry, transportation research, auction markets, computational economics, dynamic games.
Education and career
John Rust was born in Wisconsin on May 23, 1955. He graduated from
Waukesha High School in 1973, completed 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.
After graduating from University of Pennsylvania in 1977, John
Rust worked as 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.
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 Steering Committee of the Health and Retirement Study at University of Michigan (2000-2002), senior advisor at The Brattle Group (since 2004) and fellow of TIAA-CREF Institute, New York (since 2005).
Research and contributions
Dynamic discrete choice models
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. 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.