Single Market Nonparametric Identification of Multi-Attribute Hedonic Equilibrium Models
Massachusetts Institute of Technology (MIT) - Department of Economics; New Economic School
Sciences Po - Department of Economics
Pennsylvania State University
University of Alberta - Department of Mathematical and Statistical Sciences
December 29, 2014
This paper derives conditions under which preferences and technology are nonparametrically identified in hedonic equilibrium models, where products are differentiated along more than one dimension and agents are characterized by several dimensions of unobserved heterogeneity. With products differentiated along a quality index and agents characterized by scalar unobserved heterogeneity, single crossing conditions on preferences and technology provide identifying restrictions. We develop similar shape restrictions in the multi-attribute case and we provide identification results from the observation of a single market. We thereby extend identification results in Matzkin (2003) and Heckman, Matzkin, and Nesheim (2010) to accommodate multiple dimensions of unobserved heterogeneity.
Number of Pages in PDF File: 28
Keywords: Hedonic equilibrium, nonparametric identification, multidimensional unobserved heterogeneity, optimal transport
JEL Classification: C14, C61, C78
Date posted: February 9, 2014 ; Last revised: January 27, 2015
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