PANEL DATA HEDONICS: ROSEN'S FIRST STAGE AS A “SUFFICIENT STATISTIC”

Traditional cross-sectional estimates of hedonic price functions can recover marginal willingness to pay for characteristics, but face endogeneity problems for estimating non-marginal welfare measures. I show that when panel data on household demands are available, one can construct a second-order approximation to non-marginal welfare measures using only the first-stage marginal prices. With repeated cross sections of product prices, the measure can be set identified or, under a single-crossing restriction, point identified. Bounds also can be constructed when there are mobility costs. Finally, a variant remains valid when individual preferences shift over time.

• Publication year

  2020

• Venue

  International Economic Review

• Publication date

  2020-01-24

• Fields of study

  Economics

• Identifiers
  DOI 10.1111/iere.12446
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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