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A Simple Solution to the Problem of Independence of Irrelevant Alternatives in Choo and Siow Marriage Market Model

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  • Gutierrez, Federico H.

Abstract

This paper proposes a simple solution to the independence of irrelevant alternatives (IIA) problem in Choo and Siow (2006) model, overcoming what is probably the main limitation of this approach. The solution consists of assuming match-specific rather than choice-specific random preferences. The original marriage matching function gets modified by an adjustment factor that improves its empirical properties. Using the American Community Survey, I show that the new approach yields significantly different results affecting the qualitative conclusions of the analysis. The proposed solution to the IIA problem applies to other settings in which the relative "supply" of choices is observable.

Suggested Citation

  • Gutierrez, Federico H., 2019. "A Simple Solution to the Problem of Independence of Irrelevant Alternatives in Choo and Siow Marriage Market Model," GLO Discussion Paper Series 387, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:387
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    References listed on IDEAS

    as
    1. Aloysius Siow, 2015. "Testing Becker's Theory of Positive Assortative Matching," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 409-441.
    2. Rania Gihleb, 2014. "Educational Homogamy and Assortative Mating Have Not Increased," Working Paper 6052, Department of Economics, University of Pittsburgh.
    3. Eugene Choo, 2015. "Dynamic Marriage Matching: An Empirical Framework," Econometrica, Econometric Society, vol. 83(4), pages 1373-1423, July.
    4. Kirsten Cornelson & Aloysius Siow, 2016. "A Quantitative Review of Marriage Markets: How Inequality Is Remaking the American Family by Carbone and Cahn," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 193-207, March.
    5. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    6. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Independence of irrelevant alternatives; marriage market; transferable utility;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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