2025 Reports

The Econometrics of Matching with Transferable Utility: A Progress Report

Chiappori, Pierre-André; Nguyen, Dam Linh; Salanie, Bernard

Since Choo and Siow (2006), a burgeoning literature has analyzed matching markets when utility is perfectly transferable and the joint surplus is separable. We take stock of recent methodogical developments in this area. Combining theoretical arguments and simulations, we show that the separable approach is reasonably robust to omitted variables and/or non-separabilities. We conclude with a caveat on data requirements and imbalanced datasets.