Rust Bus Engine Example

The Rust bus-engine replacement problem is the canonical dynamic discrete choice example. A bus operator observes mileage and chooses whether to keep the current engine or replace it.

EconIRL ships a Rust-style environment that is suitable for a quick public MPEC smoke test.

from econirl.environments.rust_bus import RustBusEnvironment
from econirl.estimation.mpec import MPECEstimator, MPECConfig
from econirl.preferences.linear import LinearUtility
from econirl.simulation import simulate_panel

env = RustBusEnvironment(
    operating_cost=0.01,
    replacement_cost=2.0,
    num_mileage_bins=20,
    discount_factor=0.99,
)
panel = simulate_panel(env, n_individuals=100, n_periods=50)
utility = LinearUtility.from_environment(env)

model = MPECEstimator(config=MPECConfig(solver="sqp"))
summary = model.estimate(
    panel=panel,
    utility=utility,
    problem=env.problem_spec,
    transitions=env.transition_matrices,
)

print(summary.parameters)
print(summary.metadata["final_constraint_violation"])

Interpretation

The Rust-style linear utility specification estimates two parameters. The first is the operating cost slope over mileage states. The second is the replacement cost. The fitted policy gives the replacement probability by mileage state.

states = [0, 5, 10, 19]
print(summary.policy[states, 1])

Counterfactual Replacement Cost

MPEC’s lower-level estimator does not currently provide the one-call dataframe-wrapper counterfactual method used by NFXP and CCP. For simulation evidence, counterfactual replacement-cost and transition interventions are tested through the simulation harness and reported on the counterfactuals page.

Replication Boundary

This page is a package smoke test on the synthetic bus environment, not a full historical replication of the original study. The estimator’s recovery properties are established on a synthetic cell whose data-generating process is fully specified; see the Simulation Study page. The bus engine simulation page compares MPEC against the full estimator roster on a shared synthetic bus engine panel.