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Author: Jerry A. Hausman Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
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).
Author: Jerry A. Hausman Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
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).
Author: Debopam Bhattacharya Publisher: ISBN: Category : Languages : en Pages : 32
Book Description
We consider empirical measurement of equivalent/compensating variation resulting from price-change of a discrete good using individual-level data, when there is unobserved heterogeneity in preferences. We show that for binary and unordered multinomial choice, the marginal distributions of EV/CV can be expressed as simple closed-form functionals of conditional choice-probabilities under essentially unrestricted preference-distributions. These results hold even when the distribution/dimension of unobserved heterogeneity are neither known nor identified and utilities are neither quasi-linear nor parametrically specified. The welfare distributions take simple forms which are easy to compute in applications. In particular, average EV for a price-rise equals the change in average Marshallian consumer-surplus and is smaller than average CV for a normal good. These nonparametric point-identification results fail for ordered choice if the unit-price is identical for all alternatives, thereby providing a connection to Hausman-Newey's (2014) partial identification results for the limiting case of continuous choice.
Author: Debopam Bhattacharya Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper develops nonparametric methods for welfare-analysis of economic changes in the common setting of multinomial choice. The results cover (a) simultaneous price-change of multiple alternatives, (b) introduction/elimination of an option, (c) changes in choice-characteristics, and (d) choice among non-exclusive alternatives. In these cases, Marshallian consumer surplus becomes path-dependent, but Hicksian welfare remains well-defined. We demonstrate that under completely unrestricted preference-heterogeneity and income-effects, the distributions of Hicksian welfare are point-identified from structural choice-probabilities in scenarios (a), (b), and only set-identified in (c), (d). Weak-separability restores point-identification in (c). In program-evaluation contexts, our results enable the calculation of compensated-effects, i.e. the program's cash-equivalent and resulting deadweight-loss. They also facilitate theoretically justified cost- benefit comparison of interventions targeting different outcomes, e.g. a tuition-subsidy and a health-product subsidy. Welfare-analyses under endogeneity is briefly discussed. An application to data on choice of fishing-mode illustrates the methods.
Author: Jerry A. Hausman
Author: Jerry A. Hausman
Author: Bart Capéau
Author: Debopam Bhattacharya
Author: Debopam Bhattacharya
Author: Donald J. Brown
Author: Sam Cosaert
Author: Debopam Bhattacharya
Author: Padmanabhan Srinagesh
Author: Edward J. Bird
Author: Stephen L. Haley