TY - JOUR
T1 - Identification of hedonic equilibrium and nonseparable simultaneous equations
AU - Chernozhukov, Victor
AU - Galichon, Alfred
AU - Henry, Marc
AU - Pass, Brendan
N1 - Funding Information:
We thank Guillaume Carlier, Andrew Chesher, Pierre-André Chiappori, Hidehiko Ichi-mura, Arthur Lewbel, Rosa Matzkin, and multiple seminar audiences for stimulating discussions. We also thank the editor James Heckman and four referees for insightful comments. Chernozhukov’s research has received funding from the NSF (National Science Foundation). Galichon’s research has received funding from ERC (European Research Council) grants CoG-866274 and 313699, from NSF grant DMS-1716489, and from FiME (Laboratoire de Finance des Marchés de l’Energie). Henry’s research has received funding from Social Sciences and Humanities Research Council grants 435-2013-0292 and NSERC (Natural Sciences and Engineering Research Council of Canada) grant 356491-2013. Pass’s research has received support from a University of Alberta start-up grant and NSERC grants 412779-2012 and 04658-2018.
Publisher Copyright:
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PY - 2021/3
Y1 - 2021/3
N2 - This paper derives conditions under which preferences and technology are nonparametrically identified in hedonic equilibrium models. With products differentiated along a quality index and agents characterized by scalar unobserved heterogeneity, single-crossing conditions on preferences and technology provide identifying restrictions in previous work. We develop similar shape restrictions in the multiattribute case. These shape restrictions, based on optimal transport theory and generalized convexity, allow us to identify preferences for goods differentiated along multiple dimensions from the observation of a single market. We thereby derive identification results for nonseparable simultaneous equations and multiattribute hedonic equilibrium models with (possibly) multiple dimensions of unobserved heterogeneity. One of our results is a proof of absolute continuity of the distribution of endogenously traded qualities, which is of independent interest.
AB - This paper derives conditions under which preferences and technology are nonparametrically identified in hedonic equilibrium models. With products differentiated along a quality index and agents characterized by scalar unobserved heterogeneity, single-crossing conditions on preferences and technology provide identifying restrictions in previous work. We develop similar shape restrictions in the multiattribute case. These shape restrictions, based on optimal transport theory and generalized convexity, allow us to identify preferences for goods differentiated along multiple dimensions from the observation of a single market. We thereby derive identification results for nonseparable simultaneous equations and multiattribute hedonic equilibrium models with (possibly) multiple dimensions of unobserved heterogeneity. One of our results is a proof of absolute continuity of the distribution of endogenously traded qualities, which is of independent interest.
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U2 - 10.1086/712447
DO - 10.1086/712447
M3 - Article
AN - SCOPUS:85100353974
SN - 0022-3808
VL - 129
SP - 842
EP - 870
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 3
ER -