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Academic Commons Search Resultsen-usFrom Aggregate Betting Data to Individual Risk Preferences
http://academiccommons.columbia.edu/catalog/ac:154180
Chiappori, Pierre A.; Salanie, Bernard; Salanie, Francois; Gandhi, Amithttp://hdl.handle.net/10022/AC:P:15210Wed, 07 Nov 2012 00:00:00 +0000As a textbook model of contingent markets, horse races are an attractive environment to study the attitudes towards risk of bettors. We innovate on the literature by explicitly considering heterogeneous bettors and allowing for very general risk preferences, including non-expected utility. We build on a standard single-crossing condition on preferences to derive testable implications; and we show how parimutuel data allow us to uniquely identify the distribution of preferences among the population of bettors. We then estimate the model on data from US races. Within the expected utility class, the most usual specfications (CARA and CRRA) fit the data very badly. Our results show evidence for both heterogeneity and nonlinear probability weighting.Economicspc2167, bs2237EconomicsWorking papersThe Roommate Problem Is More Stable Than You Think
http://academiccommons.columbia.edu/catalog/ac:154183
Chiappori, Pierre A.; Galichon, Alfred; Salanie, Bernardhttp://hdl.handle.net/10022/AC:P:15211Wed, 07 Nov 2012 00:00:00 +0000Stable matchings may fail to exist in the roommate matching problem, both when utility is transferable and when it is not. We show that when utility is transferable, the existence of a stable matching is restored when there is an even number of individuals of indistinguishable characteristics and tastes (types.) As a consequence, when the number of individuals of any given type is large enough there always exist "quasi-stable" matchings: a stable matching can be restored with minimal policy intervention. Our results build on an analogy with an associated bipartite problem; it follows that the tools crafted in empirical studies of the marriage problem can easily be adapted to the roommate problem.Economicspc2167, bs2237EconomicsWorking papersPartner Choice and the Marital College Premium
http://academiccommons.columbia.edu/catalog/ac:133169
Chiappori, Pierre A.; Salanie, Bernard; Weiss, Yoramhttp://hdl.handle.net/10022/AC:P:10479Wed, 01 Jun 2011 00:00:00 +0000Several theoretical contributions have argued that the returns to schooling within marriage play a crucial role for human capital investments. Our paper quantifies the evolution of these returns over the last decades. We consider a frictionless matching framework รก la Becker-Shapley-Shubik, in which the gain generated by a match between two individuals is the sum of a systematic effect that only depends on the spouses' education classes and a match-specific term that we treat as random; following Choo and Siow (2006), we assume the latter component has an additively separable structure. We derive a complete, theoretical characterization of the model. We show that if the supermodularity of the surplus function is invariant over time and errors have extreme value distributions with time-invariant but education-dependent variances, the model is overidentified. We apply our method to US data on individuals born between 1943 and 1972. Our model fits the data very closely; moreover, we find that the deterministic part of the surplus is indeed supermodular and that, in line with theoretical predictions, the "marital college premium" has increased for women but not for men over the period.Economic theory, Educationpc2167, bs2237EconomicsWorking papersFatter Attraction: Anthropometric and Socioeconomic Matching on the Marriage Market
http://academiccommons.columbia.edu/catalog/ac:133175
Chiappori, Pierre A.; Oreffice, Sonia; Quintana-Domeque, Climenthttp://hdl.handle.net/10022/AC:P:10481Wed, 01 Jun 2011 00:00:00 +0000We construct a matching model on the marriage market along more than one characteristic, where individuals have preferences over physical attractiveness and socioeconomic characteristics that can be summarized by a one-dimensional index combining these various attributes. We show that under a (testable) separability assumption, the indices are ordinally identified. We estimate the model using data from the PSID. Our separability tests do not reject. We find that among men, a 10% increase in BMI can be compensated by a higher wage of around 3%. Similarly, for women, an additional year of education may compensate up to three BMI units.Economic theory, Social researchpc2167EconomicsWorking papersLearning From a Piece of Pie
http://academiccommons.columbia.edu/catalog/ac:133172
Chiappori, Pierre A.; Donni, Olivier; Komunje, Ivanahttp://hdl.handle.net/10022/AC:P:10480Wed, 01 Jun 2011 00:00:00 +0000We investigate the empirical content of the Nash solution to two-player bar-gaining games. The bargaining environment is described by a set of variables that may affect agents' preferences over the agreement sharing, the status quo outcome, or both. The outcomes (i.e., whether an agreement is reached, and if so the individual shares) and the environment (including the size of the pie) are known, but neither are the agents' utilities nor their threat points. We consider both a deterministic version of the model in which the econometrician observes the shares as deterministic functions of the variables under consideration, and a stochastic one in which because of latent disturbances only the joint distribution of incomes and outcomes is recorded. We show that in the most general framework any outcome can be rationalized as a Nash solution. However, even mild exclusion restrictions generate strong implications that can be used to test the Nash bargaining assumption. Stronger conditions further allow to recover the underlying structure of the bargaining, and in particular, the cardinal representation of individual preferences in the absence of uncertainty. An implication of this finding is that empirical works entailing Nash bargaining could (and should) use much more general and robust versions than they usually do.Economic theorypc2167EconomicsWorking papersMatching with a Handicap: The Case of Smoking in the Marriage Market
http://academiccommons.columbia.edu/catalog/ac:133178
Chiappori, Pierre A.; Oreffice, Sonia; Quintana-Domeque, Climenthttp://hdl.handle.net/10022/AC:P:10482Wed, 01 Jun 2011 00:00:00 +0000We develop a matching model on the marriage market, where individuals have preferences over the smoking status of potential mates, and over their socioeconomic quality. Spousal smoking is bad for non-smokers, but it is neutral for smokers, while individuals always prefer high socioeconomic quality. Furthermore, there is a gender difference in smoking prevalence, there being more smoking men than smoking women for all education levels, so that smoking women and non-smoking men are in short supply. The model generates clear cut conditions regarding matching patterns. Using CPS data and its Tobacco Use Supplements for the years 1996 to 2007, and proxing socioeconomic status by educational attainment, we .nd that these conditions are satis.ed. There are fewer "mixed" couples where the wife smokes than vice-versa, and matching is assortative on education within smoking types of couples. Among non-smoking wives those with smoking husbands have on average 0.14 fewer years of completed education than those with non-smoking husbands. Finally, and somewhat counterintuitively, we find that, as theory predicts, among smoking husbands those who marry smoking wives have on average 0.16 more years of completed education than those with non-smoking wives.Economic theory, Social researchpc2167EconomicsWorking papers