Nonparametric Welfare Analysis

Author(s)
Hausman, Jerry A; Newey, Whitney K
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Abstract
Exact consumer's surplus and deadweight loss are the most widely used welfare and economic efficiency measures. These measures can be computed from demand functions in straightforward ways. Nonparametric estimation can be used to estimate the welfare measures. In doing so, it seems important to account correctly for unobserved heterogeneity, given the high degree of unexplained demand variation often found in applications. This review surveys work on nonparametric welfare analysis, focusing on work that allows for general heterogeneity in demand, such as that of Hausman & Newey (2016). Keywords: consumer surplus, deadweight loss, identification, quantiles
Date issued
2017-05
URI
http://hdl.handle.net/1721.1/114158
Department
Massachusetts Institute of Technology. Department of Economics
Journal
Annual Review of Economics
Publisher
Annual Reviews
Citation
Hausman, Jerry A., and Whitney K. Newey. “Nonparametric Welfare Analysis.” Annual Review of Economics, vol. 9, no. 1, Aug. 2017, pp. 521–46.
Version: Original manuscript
ISSN
1941-1383
1941-1391
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