Stable Marriage With and Without Transferable Utility:Nonparametric Testable Implications

Laurens Cherchye, Thomas Demuynck, Bram De Rock and Frederic Vermeulen

Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: We show that transferable utility has no nonparametrically testable implications for marriage stability in settings with a single consumption observation per house- hold and heterogeneous individual preferences across households. This completes the results of Cherchye, Demuynck, De Rock, and Vermeulen (2017), who characterized Pareto efficient household consumption under the assumption of marriage stability without transferable utility. First, we show that the nonparametric testable conditions established by these authors are not only necessary but also sufficient for rationalizability by a stable marriage matching. Next, we demonstrate that exactly the same testable implications hold with and without transferable utility between household members. We build on this last result to provide a primal and dual linear programming characterization of a stable matching allocation for the observational setting at hand. This provides an explicit specification of the marital surplus function rationalizing the observed matching behavior.

Keywords: marriage stability; household consumption; nonparametric testable implications; transferable utility (search for similar items in EconPapers)
JEL-codes: C14 C78 D11 (search for similar items in EconPapers)
Pages: 20 p.
Date: 2017-07
New Economics Papers: this item is included in nep-des, nep-evo, nep-gth and nep-upt
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Citations: View citations in EconPapers (1)

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Working Paper: Stable marriage with and without transferable utility: nonparametric testable implications (2017)
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