Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211119 
Year of Publication: 
2019
Series/Report no.: 
cemmap working paper No. CWP27/19
Publisher: 
Centre for Microdata Methods and Practice (cemmap), London
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. These shape restrictions, which are 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 extend identification results in Matzkin (2003) and Heckman, Matzkin, and Nesheim (2010) to accommodate 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.
Subjects: 
Hedonic equilibrium
nonparametric identification
multidimensional unobserved heterogeneity
cyclical monotonicity
optimal transport
JEL: 
C14
C61
C78
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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