IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v2y2010i4p195-220.html
   My bibliography  Save this article

Identification and Semiparametric Estimation of Equilibrium Models of Local Jurisdictions

Author

Listed:
  • Dennis Epple
  • Michael Peress
  • Holger Sieg

Abstract

We develop a new model of household sorting in a system of residential neighborhoods. We show that this model is partially identified without imposing parametric restrictions on the distribution of unobserved tastes for neighborhood quality and the shape of the indirect utility function. The proof of identification is constructive and can be used to derive a new semiparameteric estimator. Our empirical application focuses on residential choices in the Pittsburgh metropolitan area. We find that sorting of households with children exhibit more stratification by income than sorting of households without children. (JEL C51, D12, H41, J12, R21, R23)

Suggested Citation

  • Dennis Epple & Michael Peress & Holger Sieg, 2010. "Identification and Semiparametric Estimation of Equilibrium Models of Local Jurisdictions," American Economic Journal: Microeconomics, American Economic Association, vol. 2(4), pages 195-220, November.
  • Handle: RePEc:aea:aejmic:v:2:y:2010:i:4:p:195-220
    Note: DOI: 10.1257/mic.2.4.195
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/mic.2.4.195
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/mic/data/2008-0109_data.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

    References listed on IDEAS

    as
    1. Maria Marta Ferreyra, 2007. "Estimating the Effects of Private School Vouchers in Multidistrict Economies," American Economic Review, American Economic Association, vol. 97(3), pages 789-817, June.
    2. Guido W. Imbens & Charles F. Manski, 2004. "Confidence Intervals for Partially Identified Parameters," Econometrica, Econometric Society, vol. 72(6), pages 1845-1857, November.
    3. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "An Equilibrium Model of Sorting in an Urban Housing Market," NBER Working Papers 10865, National Bureau of Economic Research, Inc.
    4. Goodspeed, Timothy J., 1989. "A re-examination of the use of ability to pay taxes by local governments," Journal of Public Economics, Elsevier, vol. 38(3), pages 319-342, April.
    5. Ferreira, Fernando, 2010. "You can take it with you: Proposition 13 tax benefits, residential mobility, and willingness to pay for housing amenities," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 661-673, October.
    6. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    7. Patrick Bajari & Matthew E. Kahn, 2005. "Estimating Housing Demand With an Application to Explaining Racial Segregation in Cities," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 20-33, January.
    8. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August.
    9. Dennis Epple & Brett Gordon & Holger Sieg, 2010. "Drs. Muth And Mills Meet Dr. Tiebout: Integrating Location-Specific Amenities Into Multi-Community Equilibrium Models," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 381-400.
    10. Bresnahan, Timothy F, 1987. "Competition and Collusion in the American Automobile Industry: The 1955 Price War," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 457-482, June.
    11. Schmidheiny, Kurt, 2006. "Income segregation and local progressive taxation: Empirical evidence from Switzerland," Journal of Public Economics, Elsevier, vol. 90(3), pages 429-458, February.
    12. JunJie Wu & Seong-Hoon Cho, 2003. "Estimating Households' Preferences for Environmental Amenities Using Equilibrium Models of Local Jurisdictions," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 189-206, May.
    13. Jesse M. Rothstein, 2006. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions," American Economic Review, American Economic Association, vol. 96(4), pages 1333-1350, September.
    14. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    15. Dennis Epple & Brett Gordon & Holger Sieg, 2010. "A New Approach to Estimating the Production Function for Housing," American Economic Review, American Economic Association, vol. 100(3), pages 905-924, June.
    16. Roland Bénabou, 1996. "Equity and Efficiency in Human Capital Investment: The Local Connection," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 237-264.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Zhi & Zhang, Qinghua, 2014. "Fundamental factors in the housing markets of China," Journal of Housing Economics, Elsevier, vol. 25(C), pages 53-61.
    2. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    3. Gravel, Nicolas & Oddou, Rémy, 2014. "The segregative properties of endogenous jurisdiction formation with a land market," Journal of Public Economics, Elsevier, vol. 117(C), pages 15-27.
    4. Yinger, John, 2015. "Hedonic markets and sorting equilibria: Bid-function envelopes for public services and neighborhood amenities," Journal of Urban Economics, Elsevier, vol. 86(C), pages 9-25.
    5. Brülhart, Marius & Bucovetsky, Sam & Schmidheiny, Kurt, 2015. "Taxes in Cities," Handbook of Regional and Urban Economics, Elsevier.
    6. Epple, Dennis & Romano, Richard, 2015. "Equilibrium and efficient provision of local public goods with peer effects," Research in Economics, Elsevier, vol. 69(3), pages 291-319.
    7. Yinger, John, 2015. "Hedonic equilibria in housing markets: The case of one-to-one matching," Journal of Housing Economics, Elsevier, vol. 29(C), pages 1-11.
    8. repec:eee:juecon:v:99:y:2017:i:c:p:48-61 is not listed on IDEAS
    9. Yong Chen & David J. Lewis & Bruce Weber, 2016. "Conservation Land Amenities And Regional Economies: A Postmatching Difference-In-Differences Analysis Of The Northwest Forest Plan," Journal of Regional Science, Wiley Blackwell, vol. 56(3), pages 373-394, June.
    10. H. Spencer Banzhaf, 2015. "Panel Data Hedonics: Rosen's First Stage and Difference-in-Differences as "Sufficient Statistics"," NBER Working Papers 21485, National Bureau of Economic Research, Inc.
    11. Abildtrup, Jens & Garcia, Serge & Olsen, Søren Bøye & Stenger, Anne, 2013. "Spatial preference heterogeneity in forest recreation," Ecological Economics, Elsevier, vol. 92(C), pages 67-77.
    12. Holmes, Thomas J. & Sieg, Holger, 2015. "Structural Estimation in Urban Economics," Handbook of Regional and Urban Economics, Elsevier.

    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Lists

    This item is featured on the following reading lists or Wikipedia pages:
    1. Identification and Semiparametric Estimation of Equilibrium Models of Local Jurisdictions (AEJ:MI 2010) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:2:y:2010:i:4:p:195-220. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.