Entropy methods for identifying hedonic models

Arnaud Dupuy, Alfred Galichon, Marc Albert Henry

Research output: Contribution to journalArticle

Abstract

This paper contributes to the literature on hedonic models in two ways. First, it makes use of Queyranne’s reformulation of a hedonic model in the discrete case as a network flow problem in order to provide a proof of existence and integrality of a hedonic equilibrium and efficient computation of hedonic prices. Second, elaborating on entropic methods developed in Galichon and Salanié (Cupid’s invisible hand: social surplus and identification in matching models. Working Paper, 2014), this paper proposes a new identification strategy for hedonic models in a single market. This methodology allows one to introduce heterogeneities in both consumers’ and producers’ attributes and to recover producers’ profits and consumers’ utilities based on the observation of production and consumption patterns and the set of hedonic prices.

Original languageEnglish (US)
Pages (from-to)405-416
Number of pages12
JournalMathematics and Financial Economics
Volume8
Issue number4
DOIs
StatePublished - Jan 1 2014

Fingerprint

Entropy Method
Model Matching
Network Flow Problem
Integrality
Reformulation
Profit
Attribute
Model
Methodology
Hedonic model
Entropy
Hedonic prices

All Science Journal Classification (ASJC) codes

  • Statistics and Probability
  • Finance
  • Statistics, Probability and Uncertainty

Cite this

Dupuy, Arnaud ; Galichon, Alfred ; Henry, Marc Albert. / Entropy methods for identifying hedonic models. In: Mathematics and Financial Economics. 2014 ; Vol. 8, No. 4. pp. 405-416.
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Entropy methods for identifying hedonic models. / Dupuy, Arnaud; Galichon, Alfred; Henry, Marc Albert.

In: Mathematics and Financial Economics, Vol. 8, No. 4, 01.01.2014, p. 405-416.

Research output: Contribution to journalArticle

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