Entropy Methods for Identifying Hedonic Models

Luxembourg Institute of Socio-Economic Research (LISER) Working Paper Series 2014-07

20 Pages Posted: 8 Jun 2015

See all articles by Arnaud Dupuy

Arnaud Dupuy

Centre de Recherche en Économie Appliquée (CREA)

Alfred Galichon

NYU, Department of Economics and Courant Institute

Marc Henry

Pennsylvania State University

Multiple version iconThere are 2 versions of this paper

Date Written: June 12, 2014

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 computational techniques of hedonic prices. Second, elaborating on entropic methods developed in Galichon and Salanié (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.

Keywords: Hedonic models, Entropic methods, Identification

JEL Classification: D12, J3, L11

Suggested Citation

Dupuy, Arnaud and Galichon, Alfred and Henry, Marc, Entropy Methods for Identifying Hedonic Models (June 12, 2014). Luxembourg Institute of Socio-Economic Research (LISER) Working Paper Series 2014-07, Available at SSRN: https://ssrn.com/abstract=2614999 or http://dx.doi.org/10.2139/ssrn.2614999

Arnaud Dupuy (Contact Author)

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

Alfred Galichon

NYU, Department of Economics and Courant Institute ( email )

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

Marc Henry

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

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