Nonparametric Identification and Estimation of Nonadditive Hedonic Models


  • James J. Heckman,

    1. Dept. of Economics, University of Chicago, 1126 E. 59th Street, Chicago, IL 60637, U.S.A., and University College Dublin, American Bar Foundation and Cowles Foundation, Yale University;,
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  • Rosa L. Matzkin,

    1. Dept. of Economics, University of California, Los Angeles, 8283 Bunche Hall, Los Angeles, CA 90095, U.S.A.;,
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  • Lars Nesheim

    1. Dept. of Economics, University College London, Gower Street, London, WC1E 6BT, U.K. and CEMMAP and Institute for Fiscal Studies;
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    • This research was supported by NSF Grants SES-024158 and BCS-0433990/BCS-0852261. Lars Nesheim also thanks the Leverhulme Trust and the U.K. Economic and Social Research Council (ESRC Grant RES-589-28-0001) for support through its funding of the Centre for Microdata Methods and Practice ( Rosa L. Matzkin's research has been supported also by NSF Grant SES-0551272/SES-0833058. We thank the co-editor, Whitney Newey, and three referees for their extremely useful input and the participants at seminars at Northwestern University, Universidad de San Andres, Princeton University, Harvard/MIT, UCLA/USC, University of California at Berkeley, University of Minnesota, the Bureau of Labor Statistics, University of Chicago, Universidad Torcuato Di Tella, the 2002 Workshop on Characteristics Models: Theory and Applications (University of Copenhagen), the 2002 Workshop on Mathematical Economics (IMPA), and the 2004 Banff International Research Station (BIRS) workshop on “Mathematical Structures in Economic Theory and Econometrics” for their useful comments. We thank Myrna Wooders and Daniel McFadden for many stimulating conversations, Donald J. Brown for helpful comments, and Yong Hyeon Yang for excellent research assistance.


This paper studies the identification and estimation of preferences and technologies in equilibrium hedonic models. In it, we identify nonparametric structural relationships with nonadditive heterogeneity. We determine what features of hedonic models can be identified from equilibrium observations in a single market under weak assumptions about the available information. We then consider use of additional information about structural functions and heterogeneity distributions. Separability conditions facilitate identification of consumer marginal utility and firm marginal product functions. We also consider how identification is facilitated using multimarket data.