Bidimensional Matching with Heterogeneous Preferences: Smoking in the Marriage Market
We develop a bidimensional matching model under transferable utility, where individuals are characterized by a continuous trait (e.g., socioeconomic status) and a binary attribute (e.g., smoking status).� The model is "truly multidimensional", in the sense that the impact of the traits cannot be summarized by a one-dimensional index.� We present a general resolution strategy based on optimal control theory, and characterize the stable matching.� We derive testable predictions about equilibrium matching patterns.� Using US data, we find that the observed marital sorting of smokers and non-smokers by education is consistent with our model.
|Date of creation:||29 Jan 2014|
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