Nonparametric Welfare Analysis

Posted: 14 Aug 2017

See all articles by Jerry A. Hausman

Jerry A. Hausman

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Whitney K. Newey

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 2017

Abstract

Exact consumer's surplus and deadweight loss are the most widely used welfare and economic efficiency measures. These measures can be computed from demand functions in straightforward ways. Nonparametric estimation can be used to estimate the welfare measures. In doing so, it seems important to account correctly for unobserved heterogeneity, given the high degree of unexplained demand variation often found in applications. This review surveys work on nonparametric welfare analysis, focusing on work that allows for general heterogeneity in demand, such as that of Hausman & Newey (2016).

Suggested Citation

Hausman, Jerry A. and Newey, Whitney K., Nonparametric Welfare Analysis (August 2017). Annual Review of Economics, Vol. 9, pp. 521-546, 2017. Available at SSRN: https://ssrn.com/abstract=3017740 or http://dx.doi.org/10.1146/annurev-economics-080315-015107

Jerry A. Hausman (Contact Author)

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

50 Memorial Drive
Room E52-271a
Cambridge, MA 02142
United States
617-253-3644 (Phone)
617-253-1330 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Whitney K. Newey

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

50 Memorial Drive
E52-262D
Cambridge, MA 02142
United States
617-253-6420 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
114
PlumX Metrics