Identification of Hedonic Equilibrium and Nonseparable Simultaneous Equations

Victor Chernozhukov, Alfred Galichon (), Marc Henry and Brendan Pass
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Alfred Galichon: NYU - New York University [New York] - NYU - NYU System, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique
Brendan Pass: University of Alberta

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Abstract: This paper derives conditions under which preferences and technology are nonparametrically identified in hedonic equilibrium models. With products differentiated along a quality index and agents characterized by scalar unobserved heterogeneity, single-crossing conditions on preferences and technology provide identifying restrictions in previous work. We develop similar shape restrictions in the multiattribute case. These shape restrictions, based on optimal transport theory and generalized convexity, allow us to identify preferences for goods differentiated along multiple dimensions from the observation of a single market. We thereby derive identification results for nonseparable simultaneous equations and multiattribute hedonic equilibrium models with (possibly) multiple dimensions of unobserved heterogeneity. One of our results is a proof of absolute continuity of the distribution of endogenously traded qualities, which is of independent interest.

Keywords: Hedonic equilibrium; Nonparametric identification; Multidimensional unobserved heterogeneity; Optimal transport (search for similar items in EconPapers)
Date: 2021-03-01
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03893143v1
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Citations: View citations in EconPapers (4)

Published in Journal of Political Economy, 2021, 129 (3), pp.842-870. ⟨10.1086/712447⟩

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Related works:
Journal Article: Identification of Hedonic Equilibrium and Nonseparable Simultaneous Equations (2021)
Working Paper: Identification of hedonic equilibrium and nonseparable simultaneous equations (2021)
Working Paper: Identification of Hedonic Equilibrium and Nonseparable Simultaneous Equations (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03893143

DOI: 10.1086/712447

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