Matching Function Equilibria: Existence, Uniqueness and Estimation

Chen, Liang; Choo, Eugene; Galichon, Alfred; Weber, Simon

doi:10.2139/ssrn.3387335

Cited by 8 publications

(8 citation statements)

References 64 publications

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“…Siow (2006), and Chiappori et al (2017) developed in the transferable utility framework, and the models by Dagsvik (2000) and Menzel (2015) in the nontransferable utility framework. Chen et al (2019) show that these models, together with some other recent contributions to the matching literature, share a common structure. The key elements of the structure are a behaviorally coherent aggregate matching function, and a system of nonlinear equations.…”

Section: Three Strands Of the Literaturementioning

confidence: 66%

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A new method for identifying the role of marital preferences at shaping marriage patterns

Naszodi

Mendonca

2021

J. Dem. Econ.

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We develop a method which assumes that marital preferences are characterized either by the scalar-valued measure proposed by Liu and Lu, or by the matrix-valued generalized Liu–Lu measure. The new method transforms an observed contingency table into a counterfactual table while preserving its (generalized) Liu–Lu value. After exploring some analytical properties of the new method, we illustrate its application by decomposing changes in the prevalence of homogamy in the US between 1980 and 2010. We perform this decomposition with two alternative transformation methods as well where both methods capture preferences differently from Liu and Lu. Finally, we use survey evidence to support our claim that out of the three considered methods, the new transformation method is the most suitable for identifying the role of marital preferences at shaping marriage patterns. These data are also in favor of measuring assortativity in preferences à la Liu and Lu.

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Section: Three Strands Of the Literaturementioning

confidence: 66%

“…An example is the harmonic marriage matching function. Although this matching function was not derived from preferences, Chen et al (2019) rationalize it with a structural model.…”

Section: Three Strands Of the Literaturementioning

confidence: 99%

A new method for identifying the role of marital preferences at shaping marriage patterns

Naszodi

Mendonca

2021

J. Dem. Econ.

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“…Recently, several papers extended this framework by adding unobserved heterogeneity in tastes-for example, Choo and Siow (2006), Dupuy and Galichon (2014), and Galichon and Salanié (2020). Our setting relies heavily on the Choo and Siow model, in particular its reformulation as a matching function equilibrium (Chen et al 2021;Galichon et al 2019).…”

Section: Relation To the Literaturementioning

confidence: 99%

“…The appeal of this model lies in its tractability: The marital surplus

ϕ_{xy}

for a couple of type ( x , y ) is identified from the mass of couples of type ( x , y ), the mass of single men of type x and the mass of single women of type y . Equilibrium is fully characterized by a set of non‐linear equations (Chen et al . 2021; Galichon et al . 2019) that can be used to construct the equilibrium marriage patterns associated with any given counterfactual marital surplus

ϕ_{xy}

for all ( x , y ), while fully accounting for the distribution of types of men and women. …”

Section: Introductionmentioning

confidence: 99%

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Marriage Market Counterfactuals Using Matching Models

Dupuy

Weber

2021

Economica

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We use a simple structural matching model with unobserved heterogeneity to produce counterfactual marriage patterns, and thus quantify the contribution of changes in marital patterns in rising income inequality. We propose an algorithm that allows us to fix the degree of assortative mating without changing the level of marital gains and hence isolate the intensive and extensive margins (i.e. isolate changes in assortative mating from changes in marriage rates). We apply this approach to US data from 1962 to 2017, and show that marital patterns can explain about a quarter of the rise in income inequality, the intensive margin contributing 7%, the extensive margin the remaining 93%. Our algorithm also allows us to show that the extensive margin is itself driven for three-fifths by a change in the total number of singles and for two-fifths by a change in the distribution of types among singles (in particular low-educated women).

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Two-sided heterogeneity, endogenous sharing, and international matching markets

Choi

2020

Econ Theory

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This paper develops a multi-country, multi-sector, and multi-factor model of two-sided matching between heterogeneous workers and entrepreneurs in which agents in different countries can form crosscountry teams. Sorting, matching, and sharing problems are all considered in a unified framework. Equilibrium is characterized by endogenous sharing rules, which break away from competitive marginal productivity theories of factor returns. I illustrate that a reduction in the cost of sector-specific matching can increase welfare for all agents without conflicts of interest, and that a bilateral economic integration agreement can affect the welfare of agents in an unrelated third country. Furthermore, I demonstrate that rising income inequality can be accompanied by strengthening negative assortative matching.

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Matching Function Equilibria: Existence, Uniqueness and Estimation

Cited by 8 publications

References 64 publications

A new method for identifying the role of marital preferences at shaping marriage patterns

A new method for identifying the role of marital preferences at shaping marriage patterns

Marriage Market Counterfactuals Using Matching Models

Two-sided heterogeneity, endogenous sharing, and international matching markets

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