IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp8178.html
   My bibliography  Save this paper

Entropy Methods for Identifying Hedonic Models

Author

Listed:
  • Dupuy, Arnaud

    (University of Luxembourg)

  • Galichon, Alfred

    (New York University)

  • Henry, Marc

    (Pennsylvania State University)

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.

Suggested Citation

  • Dupuy, Arnaud & Galichon, Alfred & Henry, Marc, 2014. "Entropy Methods for Identifying Hedonic Models," IZA Discussion Papers 8178, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8178
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp8178.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2004. "Identification and Estimation of Hedonic Models," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 60-109, February.
    2. Arnaud Dupuy & Alfred Galichon, 2014. "Personality Traits and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 122(6), pages 1271-1319.
    3. Pierre-André Chiappori & Robert McCann & Lars Nesheim, 2010. "Hedonic price equilibria, stable matching, and optimal transport: equivalence, topology, and uniqueness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 42(2), pages 317-354, February.
    4. Richard Thaler & Sherwin Rosen, 1976. "The Value of Saving a Life: Evidence from the Labor Market," NBER Chapters, in: Household Production and Consumption, pages 265-302, National Bureau of Economic Research, Inc.
    5. Rosa L. Matzkin, 2003. "Nonparametric Estimation of Nonadditive Random Functions," Econometrica, Econometric Society, vol. 71(5), pages 1339-1375, September.
    6. Arnaud Dupuy & Alfred Galichon, 2014. "Personality traits and the marriage market," Post-Print hal-03470458, HAL.
    7. Epple, Dennis, 1987. "Hedonic Prices and Implicit Markets: Estimating Demand and Supply Functions for Differentiated Products," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 59-80, February.
    8. repec:dau:papers:123456789/6486 is not listed on IDEAS
    9. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
    10. James J. Heckman & Rosa L. Matzkin & Lars Nesheim, 2010. "Nonparametric Identification and Estimation of Nonadditive Hedonic Models," Econometrica, Econometric Society, vol. 78(5), pages 1569-1591, September.
    11. A. Golan & H. Shalit, 1993. "Wine Quality Differentials In Hedonic Grape Pricing," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(2), pages 311-321, May.
    12. Ivar Ekeland, 2010. "Existence, uniqueness and efficiency of equilibrium in hedonic markets with multidimensional types," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 42(2), pages 275-315, February.
    13. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    14. Brown, James N & Rosen, Harvey S, 1982. "On the Estimation of Structural Hedonic Price Models," Econometrica, Econometric Society, vol. 50(3), pages 765-768, May.
    15. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    16. Zvi Griliches, 1961. "Hedonic Price Indexes for Automobiles: An Econometric of Quality Change," NBER Chapters, in: The Price Statistics of the Federal Goverment, pages 173-196, National Bureau of Economic Research, Inc.
    17. repec:hal:spmain:info:hdl:2441/361levbcs399s9oa154em6h9jl is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhou Rongxi & Xiong Yahui & Wang Ning & Wang Xizu, 2019. "Coupling Degree Evaluation of China’s Internet Financial Ecosystem Based on Entropy Method and Principal Component Analysis," Journal of Systems Science and Information, De Gruyter, vol. 7(5), pages 399-421, October.
    2. Victor Chernozhukov & Alfred Galichon & Marc Henry & Brendan Pass, 2021. "Identification of Hedonic Equilibrium and Nonseparable Simultaneous Equations," Journal of Political Economy, University of Chicago Press, vol. 129(3), pages 842-870.
    3. Victor Chernozhukov & Alfred Galichon & Marc Henry & Brendan Pass, 2018. "Single Market Nonparametric Identification of Multi-Attribute Hedonic Equilibrium Models," Working Papers hal-01169655, HAL.
    4. repec:spo:wpmain:info:hdl:2441/4kovgv3hs883bok2tvdkibejb6 is not listed on IDEAS
    5. repec:hal:spmain:info:hdl:2441/4kovgv3hs883bok2tvdkibejb6 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:spo:wpmain:info:hdl:2441/5qh5s98no08b0p4s2sgkev0893 is not listed on IDEAS
    2. Arnaud Dupuy & Alfred Galichon & Marc Henry, 2014. "Entropy Methods for Identifying Hedonic Models," Sciences Po publications info:hdl:2441/5qh5s98no08, Sciences Po.
    3. repec:hal:spmain:info:hdl:2441/5qh5s98no08b0p4s2sgkev0893 is not listed on IDEAS
    4. repec:hal:spmain:info:hdl:2441/5pur9qsgqa81hacarhshk7oh2p is not listed on IDEAS
    5. repec:hal:spmain:info:hdl:2441/4kovgv3hs883bok2tvdkibejb6 is not listed on IDEAS
    6. repec:spo:wpmain:info:hdl:2441/4kovgv3hs883bok2tvdkibejb6 is not listed on IDEAS
    7. Victor Chernozhukov & Alfred Galichon & Marc Henry & Brendan Pass, 2018. "Single Market Nonparametric Identification of Multi-Attribute Hedonic Equilibrium Models," SciencePo Working papers Main hal-01169655, HAL.
    8. Jeremy T. Fox, 2018. "Estimating matching games with transfers," Quantitative Economics, Econometric Society, vol. 9(1), pages 1-38, March.
    9. Arnaud Dupuy, 2021. "Migration in China: To work or to wed?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(4), pages 393-415, June.
    10. G. Carlier & I. Ekeland, 2019. "Equilibrium in quality markets, beyond the transferable case," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(2), pages 379-391, March.
    11. Dupuy, Arnaud & Galichon, Alfred, 2017. "A Note on the Estimation of Job Amenities and Labor Productivity," IZA Discussion Papers 10900, Institute of Labor Economics (IZA).
    12. Victor Chernozhukov & Alfred Galichon & Marc Henry & Brendan Pass, 2021. "Identification of Hedonic Equilibrium and Nonseparable Simultaneous Equations," Journal of Political Economy, University of Chicago Press, vol. 129(3), pages 842-870.
    13. Bishop, Kelly C. & Timmins, Christopher, 2019. "Estimating the marginal willingness to pay function without instrumental variables," Journal of Urban Economics, Elsevier, vol. 109(C), pages 66-83.
    14. James J. Heckman & Rosa L. Matzkin & Lars Nesheim, 2010. "Nonparametric Identification and Estimation of Nonadditive Hedonic Models," Econometrica, Econometric Society, vol. 78(5), pages 1569-1591, September.
    15. James J. Heckman, 2003. "Simulation and Estimation of Hedonic Models," CESifo Working Paper Series 1014, CESifo.
    16. C. Lanier Benkard & Patrick Bajari, 2004. "Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach," NBER Working Papers 10278, National Bureau of Economic Research, Inc.
    17. Bajari, Patrick & Benkard, C. Lanier, 2004. "Demand Estimation With Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach," Research Papers 1842, Stanford University, Graduate School of Business.
    18. Steven S. Vickner, 2015. "Estimating the Implicit Price of Convenience: A Hedonic Analysis of the US Breakfast Sausage Market," Agribusiness, John Wiley & Sons, Ltd., vol. 31(2), pages 281-292, April.
    19. Suqin Ge & João Macieira, 2024. "Unobserved Worker Quality and Inter‐Industry Wage Differentials," Journal of Industrial Economics, Wiley Blackwell, vol. 72(1), pages 459-515, March.
    20. Steve Gibbons & Stephan Heblich & Esther Lho & Christopher Timmins, 2016. "Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain," SERC Discussion Papers 0207, Centre for Economic Performance, LSE.
    21. Alfred Galichon & Scott Kominers & Simon Weber, 2014. "An Empirical Framework for Matching with Imperfectly Transferable Utility," Working Papers hal-03460155, HAL.
    22. Frank F. Limehouse & Peter C. Melvin & Robert E. McCormick, 2010. "The Demand for Environmental Quality: An Application of Hedonic Pricing in Golf," Journal of Sports Economics, , vol. 11(3), pages 261-286, June.
    23. Victor Ginsburgh & Jianping Mei & Michael Moses, 2006. "On the computation of art indices in art," ULB Institutional Repository 2013/7290, ULB -- Universite Libre de Bruxelles.
    24. Masha Maslianskaia-Pautrel, 2013. "Hedonic Model with Discrete Consumer Heterogeneity and Horizontal Differentiated Housing," CEEES Paper Series CE3S-03/13, European University at St. Petersburg, Department of Economics.
    25. James J. Heckman & Rosa Matzkin & Lars Nesheim, 2003. "Simulation and Estimation of Nonaddative Hedonic Models," NBER Working Papers 9895, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    hedonic models; entropic methods; identification;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp8178. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.