Single Market Nonparametric Identification of Multi-Attribute Hedonic Equilibrium Models

28 Pages Posted: 9 Feb 2014 Last revised: 27 Jan 2015

Victor Chernozhukov

Massachusetts Institute of Technology (MIT) - Department of Economics; New Economic School

Alfred Galichon

NYU, Department of Economics and Courant Institute

Marc Henry

Pennsylvania State University

Brendan Pass

University of Alberta - Department of Mathematical and Statistical Sciences

Date Written: December 29, 2014

Abstract

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.

Keywords: Hedonic equilibrium, nonparametric identification, multidimensional unobserved heterogeneity, optimal transport

JEL Classification: C14, C61, C78

Suggested Citation

Chernozhukov, Victor and Galichon, Alfred and Henry, Marc and Pass, Brendan, Single Market Nonparametric Identification of Multi-Attribute Hedonic Equilibrium Models (December 29, 2014). Available at SSRN: https://ssrn.com/abstract=2392549 or http://dx.doi.org/10.2139/ssrn.2392549

Victor Chernozhukov

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-262f
Cambridge, MA 02142
United States
617-253-4767 (Phone)
617-253-1330 (Fax)

HOME PAGE: http://www.mit.edu/~vchern/

New Economic School

47 Nakhimovsky Prospekt
Moscow, 117418
Russia

Alfred Galichon

NYU, Department of Economics and Courant Institute ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

Marc Henry (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Brendan Pass

University of Alberta - Department of Mathematical and Statistical Sciences ( email )

Edmonton, Alberta T6G 2G1
Canada

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