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Title: Understanding Mate Preferences from Two-Sided Matching Markets: Identi fication, Estimation and Policy Analysis
Citation Type: Miscellaneous
Publication Year: 2011
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Abstract: In this paper we estimate the utility functions over partners characteristics from the aggregate matching patterns, using a structural two-sided matching model without transfer. A distinct feature of our approach is the ability to separately identify utility functions of men and women, which is absent in the matching models with transfer;e.g., Choo and Siow (2006). We argue that the deferred-acceptance algorithm can be represented as a special demand/supply system. It thus leads to a fast algorithmto compute the joint distribution of characteristics of married couples implied by the model without simulation. Based on it, we present a set of new nonparametric identification results and propose consistent estimators, which are free from the curse of dimensionality induced by large number of players. Testable implications of Men(Women) optimal stable matching are also investigated. Furthermore, we consider the inference problem without imposing equilibrium selection. We show that a setof moment inequalities can be derived from the no-blocking-pair condition without solving the game. Besides marriage market, our estimators can also apply to other two-sided matching markets in labor and IO.We use the data of Current Population Survey to estimate the utility functions over spouses education level. We find that men care more about the similarity in spouseseducation than women do. Meanwhile, womens education level is becoming more attractive to men compared to 20 years ago. It is well known that marriage market is one of the key considerations of education choice, but such endogeneity problem in empirical two-sided matching models is usually assumed away. Therefore, we develop a structural pre-marital educational choice model that accounts for marriage market prospect. We use the estimated preference to compute the return to schooling within marriage, and estimate the cost distributions of education via the structural model. By shifting the cost distribution of women via the lump-sum tuition subsidy, we find that the college attendance rate increases for both women and men. Moreover, the new policy creates more college-educated couples, while the correlation of the joint distribution of education of married couples remains unchanged.
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Authors: Hsieh, Yu-Wei
Publisher: New York University
Data Collections: IPUMS CPS
Topics: Family and Marriage, Other
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