A practical revealed preference model for separating preferences and availability effects in marriage formation.

Area of Science:

• Demographic modeling
• Sociological research
• Behavioral economics

Background:

• Partnership formation is crucial for demographic analysis.
• Existing models often struggle with unobserved individual characteristics.
• Understanding partner preferences requires accounting for both observed and unobserved traits.

Purpose of the Study:

• To develop a robust statistical model for partnership formation.
• To create an estimator for preference parameters in bipartite populations.
• To validate the estimator's performance using simulation studies.

Main Methods:

• Utilized a matching model for bipartite populations.
• Incorporated individual utility functions based on observed and unobserved characteristics.
• Developed an estimator using sample survey data on partnerships and population composition.
• Conducted simulation studies using Survey of Income and Program Participation (SIPP) data.

Main Results:

• The estimator successfully recovers preference parameters.
• Identified preference parameters are invariant to changes in partner availability.
• The estimator demonstrates accurate confidence interval coverage in simulations.
• The model effectively captures individual preferences considering both observable and unobservable factors.

Conclusions:

• The developed estimator provides a reliable method for analyzing partnership formation.
• The model's robustness to population composition variations is confirmed.
• This approach enhances demographic modeling by accounting for complex individual preferences.