Economics 345, Empirical Labor Economics
Spring 2008

Instructor: James J. Heckman, jjh@uchicago.edu
Lecture classroom: Rosenwald 301
Lecture times: Tuesday and Thursday, 1:30pm - 2:50pm
Technical Lectures: Rosenwald 015, Friday, 3:00pm - 4:50pm
Teaching Assistants:

• Seong Moon
• Rodrigo Pinto
• Dan Schmierer

TA session times: Monday, 4:30pm - 5:50pm
TA session classroom: Rosenwald 301

If you experience problems with this website, please contact John Trujillo or Jennifer Pachon.

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Class Overview

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This course focuses on the origins of inequality at a point in time, across the lifecycle within a lifetime and over generations. It considers models and evidence on the pricing of productive traits (and, more generally, the social consequences of these traits), sorting by traits and the origins of traits. The technology of skill and trait formation is developed in different market settings. The role of the family is explored, and studies of heritability and family influence are presented. Economic models of the household are examined.

Models are developed using econometric methods and rich data sources. There will be an optional third lecture each week that teaches more rigorous economic theory and the econometric foundations of modern analytical labor economics: (a) discrete choice; (b) factor models; (c) IV methods; (d) computational methods; (e) hedonic models and (f) dynamic models.

Requirements: All students participating in this class (auditing or taking for credit) are required to present a discussion of a paper (or group of papers) selected with the consent of the instructor. There will be a written final exam and weekly homework.

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Main Syllabus and Lecture Notes

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NOTE: Please note that the lecture notes posted here are for your convenience. Professor Heckman may edit them significantly up until the day when he uses them in class, so please keep this in mind if you intend to print them out.

1. Inequality: An Overview
   • Autor, David H. and Katz, Lawrence F. and Kearney, Melissa S. (2006). "The Polarization of the U.S. Labor Market." American Economic Review, 96(2):189-194.
   • Piketty, Thomas. (2000). "Theories of Persistent Inequality and Intergenerational Mobility." in Handbook of Income Distribution, A. Atkinson and F. Bourguignon, eds. Elsevier Science: Amsterdam. pp. 429-476.
   • Piketty, Thomas and Saez, Emmanuel (2003). Updated and expanded version of "Income Inequality in the United States, 1913-1998." Originally published in: Quarterly Journal of Economics, 118(1): 1-39. Updated Tables and Figures.
   • Eckstein, Zvi and Nagypál, Éva (2004). "The Evolution of U.S. Earnings Inequality: 1961-2002." Federal Reserve Bank of Minneapolis Quarterly Review, 28(2): 10-29.
   • Aaronson, Daniel and Sullivan, Daniel (2001). "Growth in Worker Quality." Economic Perspectives, Q4: 53-74.
   • Heckman, James J. and Lafontaine, Paul A. (2008). "The American High School Graduation Rate: Trends and Levels." Unpublished manuscript, University of Chicago, Department of Economics.
     • Handout for Heckman and LaFontaine (2008).
   • Heckman, James J. and LaFontaine, Paul A. (2006). "Bias-Corrected Estimates of GED Returns." Journal of Labor Economics, 24(3): 661-700.
     • Handout for Heckman and LaFontaine, (2006).
   • Handout for Heckman and LaFontaine, (2007) "The Increasing Importance of Education" .
   • Heckman, James J. (2008). "Schools, Skills and Synapses." Forthcoming, Economic Inquiry.
     • Handout for Heckman (2008).
     • Appendix
     • Jacobs Foundation Version of Handout for "Schools, Skills and Synapses"
2. Pricing equations, models for wages
   1. Sorting and pricing mechanisms
      • Heckman, J. and J. Scheinkman (1987), "The Importance of Bundling in A Gorman-Lancaster Model of Demand For Characteristics: A Theoretical Analysis With Evidence From the Labor Market", Review of Economic Studies , April, 54, 323-339.
        • Handout for Heckman and Scheinkman (1987)
      • Sattinger, Michael. (1979). " Differential Rents and the Distribution of Earnings," Oxford Economic Papers, 31(1): 60-71.
        • Heckman, James J. (2007). "Overview: Bringing Firms into Wage Determinations."
        • Detailed Notes on Sattinger (1979)
      • Koopmans, Tjalling C. and Martin Beckmann (1957). "Assignment Problems and the Location of Economic Activities," Econometrica 25(1): 53-76.
        • Notes on Koopmans and Beckmann.
      • Heckman, James J. (2007). "Overview of Models of Sorting and Matching (1-1 Match Case)."
      • Gale, D. and Shapley, L.S. (1962). "College Admissions and the Stability of Marriage," American Mathematical Monthly, 69(1): 9-15.
        • Heckman, James J. (2007). "Notes on the Gale-Shapley Algorithm ."
      • Tinbergen, Jan (1956). "On the Theory of Income Distribution." Weltwirtschaftliches Archiv, 77(2): 155-173. Reprinted in Tinbergen, Jan (1959). Selected Papers, L.H. Klaassen, L.M. Koyck and H.J. Witteveen, eds. Amsterdam: North-Holland.
      • Rosen, Sherwin. (1974). "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition." Journal of Political Economy, 82(1): 34-55.
      • Heckman, J. and G. Sedlacek (1985). "Heterogeneity, Aggregation and Market Wage Functions: An Empirical Model of Self-Selection in the Labor Market," Journal of Political Economy, 93(6), 1077-1125.
        • Handout for Heckman and Sedlacek (1985).
   2. Models for pricing of cognitive and noncognitive skills
1. Mincer models
• Heckman, James J.; Lochner, Lance J. and Todd, Petra E. (2006). "Earnings Equations and Rates of Return: The Mincer Equation and Beyond," in Handbook of the Economics of Education, Hanushek, Eric A. and Welch, Frank, eds. (Amsterdam: North-Holland), pp. 307-458.
  • Handout for Heckman, Lochner, and Todd (2006).
2. Cognitive and noncognitive factors in wage determination
• Borghans, Lex; Duckworth, Angela L.; Heckman, James J. and ter Weel, Bas. (2008). "The Economics and Psychology of Personality Traits." Forthcoming, Journal of Human Resources.
  • Handout for Borghans, et al. (2008).
• Heckman, James J., Stixrud, Jora and Urzua, Sergio (2006). "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, 24(3): 411-482.
  • Handout for Heckman, Stixrud, and Urzua (2006).
• Hansen, Karsten, Heckman, James J. and Mullen, Kathleen (2004). "The Effect of Schooling and Ability on Achievement Test Scores " Journal of Econometrics, 121(1-2): 39-98.
  • Handout for Hansen, Heckman and Mullen (2004).
3. Links to Behavioral Economics
• Camerer, Colin F. and Loewenstein, George. (2004). "Introduction: Behavioral Economics: Past, Present and Future." in Advances in Behavioral Economics, C. Camerer, G. Loewenstein and M. Rabin, eds. Princeton, NJ: Princeton University Press. pp. 1-52.
• Starmer, Chris. (2004). "Developments in Nonexpected-Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk." in Advances in Behavioral Economics, C. Camerer, G. Loewenstein and M. Rabin, eds. Princeton, NJ: Princeton University Press. pp. 104-147
• Frederick, Shane; Loewenstein, George and O'Donoghue, Ted. (2004). "Time Discounting and Time Preference: A Critical Review." in Advances in Behavioral Economics, C. Camerer, G. Loewenstein and M. Rabin, eds. Princeton, NJ: Princeton University Press. pp. 162-222.
• Fehr, Ernst and Schmidt, Klaus. "A Theory of Fairness, Competition, and Cooperation." in Advances in Behavioral Economics, C. Camerer, G. Loewenstein and M. Rabin, eds. Princeton, NJ: Princeton University Press. pp. 271-296.
• Ozdenoren, Emre, Salant, Stephen, and Silverman, Dan. (2008). "Willpower and the Optimal Control of Visceral Urges." Unpublished manuscript, University of Michigan, Department of Economics.
3. Education, skill formation and rates of return
1. Ben Porath
   • Ben-Porath, Yoram. (1967). "The Production of Human Capital and the Life Cycle of Earnings." Journal of Political Economy 75(4, Part I): 352-365.
     • Notes on Ben-Porath
   • Heckman, James J., Lochner, Lance and Cossa, Ricardo (2003). " Learning-by-Doing versus On-the-Job Training: Using Variation Induced by the EITC to Distinguish between Models of Skill Formation," in E. Phelps, ed. Designing Inclusion: Tools to Raise Low-End Pay and Employment in Private Enterprise. New York: Cambridge University Press. pp. 74-130.
     • Handout for Heckman, Lochner and Cossa (2003).
   • Grossman, Michael (2000). "The Human Capital Model," in Handbook of Health Economics, eds. Culyer, A. J. & Newhouse, J. P. (Elsevier, Amsterdam), Vol 1, pp. 347-408.
   • Heckman, James J. (2007). "The Economics, Technology and Neuroscience of Human Capability Formation." Proceedings of the National Academy of Sciences, 104(33): 13250-13255.
     • Handout for Heckman (2007).
   • Browning, Martin, Lars Peter Hansen and James J. Heckman (1999). " Micro Data and General Equilibrium Models," in J. Taylor and M. Woodford, eds. Handbook of Macroeconomics. Amsterdam: North-Holland. pp. 543-633. Section 2 only.
2. Models of schooling
   • Card, David. (2001). "Estimating the Return of Schooling: Progress on Some Persistent Econometric Problems." Econometrica, 69(5): 1127-1160.
   • Willis, Robert and Sherwin Rosen. (1979). "Education and Self-Selection," Journal of Political Economy, 87(5, Part 2): S7-S36.
     • Handout for Willis and Rosen. (1979) .
   • Heckman, James J., Sergio Urzua and Edward Vytlacil. (2006). "Understanding Instrumental Variables in Models with Essential Heterogeneity," Review of Economics and Statistics, 88(3): 389-432.
     • Handout for Heckman, Urzua and Vytlacil (2006).
   • Carneiro, Pedro and James J. Heckman (2002). "The Evidence on Credit Constraints in Post-Secondary Schooling," Economic Journal 112(482): 705-734.
     • Handout for Carneiro and Heckman (2002).
   • Heckman, James J.; Lochner, Lance J. and Todd, Petra E. (2006). "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond." in Handbook of the Economics of Education, E. Hanushek and F. Welch, eds. Amsterdam: Elsevier. pp. 307-458.
     • Handout for Heckman, Lochner and Todd (2006).
   • Heckman, James J.; Lochner, Lance J. and Todd, Petra E. (2008). "Earnings Functions and Rates of Return," Forthcoming Journal of Human Capital.
   • Cameron, Stephen V. and Taber, Christopher. "Estimation of Educational Borrowing Constraints Using Returns to Schooling," Journal of Political Economy, 112(1, Part 1):132-182.
4. Accounting for uncertainty and dynamics
   • Keane, M. and K. Wolpin (1997), "The Career Decisions of Young Men," Journal of Political Economy , 105(3), 473-522.
     • Notes on Keane and Wolpin (1997).
   • Cameron, Stephen V. and James J. Heckman (1998). "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males." Journal of Political Economy 106(2): 262-333.
     • Handout for Cameron and Heckman (1998).
   • Cameron, Stephen V. and James J. Heckman. (2001). "The Dynamics of Educational Attainment for Black, Hispanic, and White Males,"
     Journal of Political Economy 109(3): 455-499.
     • Handout for Cameron and Heckman (2001).
   • Cunha, Flavio and Heckman, James J. (2007). "The Evolution of Inequality, Heterogeneity and Uncertainty in Labor Earnings in the U.S. Economy." Forthcoming, Journal of Political Economy.
• Handout for Cunha and Heckman (2008).
• Handout: "Inequality and Uncertainty: The Evolution of Labor Earnings Risk in the U.S. Economy"
• Abbring, Jaap and Heckman, James J. (2007). "Econometric Evaluation of Social Programs, Part III: Distributional Treatment Effects, Dynamic Treatment Effects, Dynamic Discrete Choice, and General Equilibrium Policy Evaluation." in Handbook of Econometrics, Vol. 6B, J. Heckman and E. Leamer, eds. Amsterdam: Elsevier. pp. 5145-5303.
  • Handout for Abbring and Heckman (2007).
5. General equilibrium
• Johnson, William R. (1978). "A Theory of Job Shopping," Quarterly Journal of Economics, 92( 2): 261-278.
  • Handout for Johnson (1978).
• "Gittins Index and Miller’s Model of Turnover"
• "A Matching Model"
• Heckman, James J. , Lance J. Lochner and Christopher Taber. (1998). "Explaining Rising Wage Inequality: Explorations with a Dynamic General Equilibrium Model of Labor Earnings with Heterogeneous Agents." Review of Economic Dynamics, 1(1): 1-58.
• Handout for Heckman, Lochner and Taber (1998).
6. Formation of skills and preferences: Models for the evolution of skills, family influence and intergenerational transmission
   1. Introduction
      • Bowles, Samuel; Gintis, Herbert and Osborne-Groves, Melissa. (2005). Unequal Chances: Family Background and Economic Success. New York : Russell Sage Foundation.
   2. Conventional wisdom
      • Becker, Gary S. and Tomes, Nigel. (1986). "Human Capital and the Rise and Fall of Families." Journal of Labor Economics, 4(3, Part 2): S1-S39.
   3. The technology of skill formation
   • Knudsen, Eric I., Heckman, James J., Cameron, Judy and Shonkoff,
     Jack P. (2006). "Economic, Neurobiological, and Behavioral Perspectives on Building America’s Future workforce," Proceedings of the National Academy of Sciences. 103(27): 10155-10162.
     • Handout for Heckman, James J. (2006). "The Technology and Neuroscience of Skill and Health Formation." Presented at "Economic Causes and Consequences of Population Aging," Robert Fogel 80th Birthday Celebration, November 18, 2006
   • Cunha, Flavio and James J. Heckman (2007). "The Technology of Skill Formation," American Economic Review, 97(2): 31-47.
     • Handout for Cunha and Heckman (2007).
   • Cunha, Flavio, Heckman, James J., Lochner, Lance J. and Masterov, Dimitriy V. (2006). " Interpreting the Evidence on Life Cycle Skill Formation ," in Handbook of the Economics of Education, edited by E. Hanushek and F. Welch. Amsterdam: North Holland.
     • Handout for Cunha, Heckman, Lochner and Masterov (2006).[20 mb!]
   • Wößmann, Ludger (2008). "Efficiency and Equity of European Education and Training Policies," International Tax and Public Finance, 15(2): 199-230.
   • Handouts:
   • Heckman, James J. (2006). "Heritability"
   • Heckman, James J. (2007). "The GED: Evidence on Noncognitive Skills."
   • Heckman, James J. (2008). "America's Growing High School Dropout Rate: Evidence and Interpretations."
   • Heckman, James J. (2008). "Noncognitive Skills: Acquisition and Economic Consequences."
   • Heckman, James J. (2008). "The Technology of Skill Formation."
   • Heckman, James J. (2008). "Employer Learning."
   • Taylor, Shelley E. (2008). "Stress and Health Across the Lifespan."
   1. Estimating the production function for skills
   • Cunha, Flavio and Heckman, James J. (2008). "Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation," Unpublished manuscript, University of Chicago, Department of Economics. Forthcoming, Journal of Human Resources.
     • Handout for Cunha and Heckman (2008).
   • Todd, Petra E. and Wolpin, Kenneth I. (2006). "The Production of Cognitive Achievement in Children: Home, School and Racial Test Score Gaps," Journal of Human Capital, 1(1): 91-136.
7. Models of the Household
   1. Theory and Identification
   • Bergstrom, Theodore C. (1997). "A Survey of Theories of the Family." in Handbook of Population and Family Economics, Vol. 1A, M. Rosenzweig and O. Stark, eds. Amsterdam: Elsevier Science. pp. 21-79.
   • Laitner, John (1997). "Intergenerational and Interhousehold Economic Links." in Handbook of Population and Family Economics, Vol. 1A, M. Rosenzweig and O. Stark, eds. Amsterdam: Elsevier Science. pp. 189-238.
   • Weiss, Yoram. (1997). "The Formation and Dissolution of Families: Why Marry? Who Marries Whom? And What Happens upon Divorce?" in Handbook of Population and Family Economics, Vol. 1A, M. Rosenzweig and O. Stark, eds. Amsterdam: Elsevier Science. pp. 189-238.
   • Chiappori, Pierre-Andre (1992). "Collective Labor Supply and Welfare," Journal of Political Economy, 100(3), 437-467 .
   • Manser, Marilyn and Brown, Murray (1980). "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, 21(1), 31-44.
   2. Applications
   • Chiappori, Pierre-Andre; Fortin, Bernard and Lacroix, Guy (2002). "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, 110(1), 37-72.
   • Blundell, Richard; Chiappori, Pierre-Andre; Magnac, Thierry and Meghir, Costas (2007). "Collective Labour Supply: Heterogeneity and Non-Participation," Review of Economic Studies, 74(2), 417-445.
   • Duflo, Esther and Udry, Christopher (2004). "Intrahousehold Resource Allocation in Cote D'Ivoire: Social Norms, Separate Accounts and Consumption Choices," NBER Working Paper No. 10498.
   • Lundberg, Shelly and Robert A. Pollak (2007). "The American Family and Family Economics," Journal of Economic Perspectives, 21(2): 3-26.
   • Stevenson, Betsey, and Justin Wolfers (2007). "Marriage and Divorce: Changes and Their Driving Forces," Journal of Economic Perspectives, 21(2): 27-52.
   • Fryer, Roland G., Jr. (2007). "Guess Who's Been Coming to Dinner? Trends in Interracial Marriage over the 20th Century," Journal of Economic Perspectives, 21(2): 71-90.
   • McLanahan, Sara (2004). "Diverging Destinies: How Children Fare Under the Second Demographic Transition," Demography, 41(4): 607-627.
   • Ginther, Donna K. and Robert A. Pollak (2004). "Family Structure and Children's Educational Outcomes: Blended Families, Stylized Facts, and Descriptive Regressions," Demography, 41(4): 671-696.
   • Behrman, Jere R., Robert A. Pollak, and Paul Taubman (1995). "The Wealth Model: Efficiency in Education and Distribution in the Family," Chapter 5 in Jere R. Behrman, Robert A. Pollak, and Paul Taubman, From Parent to Child: Intrahousehold Allocations and Intergenerational Relations in the United States. Chicago: University of Chicago Press. pp. 113-138.
   • Pollak, Robert A. (2002). "Gary Becker's Contributions to Family and Household Economics," Review of Economics of the Household, 1(1-2): 111-141. NBER Working Paper 9232.
   • Lundberg, Shelly and Robert A. Pollak. (2001). "Efficiency in Marriage," Review of Economics of the Household, 1(3): 153-167. NBER Working Paper No. 8642.
   1. Bargaining in Marriage
      • Lundberg, Shelly and Robert A. Pollak (2008). "Bargaining in Families," Unpublished manuscript, University of Washington.
      • Lundberg, Shelly and Robert A. Pollak (1996). "Bargaining and Distribution in Marriage ," Journal of Economic Perspectives, 10(4): 139-158.
      • Lundberg, Shelly and Robert A. Pollak (1994). "Noncooperative Bargaining Models of Marriage," American Economic Review, 84(2): 132-137.
      • Lundberg, Shelly and Robert A. Pollak (1993). "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, 101(6): 988-1010.
      • Lundberg, Shelly, Robert A. Pollak, and Terence J. Wales (1997). "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit ," Journal of Human Resources, 32(3): 463-480.
   • Slides
   • Pollak, Robert A. (2008). Slides : "Bargaining in Families"
   • Lundberg, Shelly and Robert A. Pollak. (2008). Slides: "Sorting in the Marriage Market, and the Incentives to Accumulate Human Capital."
   • Pollak, Robert A. (2008). Slides : "Allocating Time: Individuals' Technologies and Household Technology."
   3. Extensions
   • Mazzocco, Maurizio (2007). "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," Review of Economic Studies, 74(3), 857-895.
   • Apps, Patricia F. and Rees, Ray (1997). "Collective Labor Supply and Household Production," Journal of Political Economy, 105(1), 178-190.
   • Ermisch, John, Marco Francesconi, and Thomas Siedler (2006). "Intergenerational Mobility and Marital Sorting," Economic Journal, 116: 659-679.
   • Thomas, Duncan (1990). "Intra-household Resource Allocation: An Inferential Approach," Journal of Human Resources, 25(4): 635‑664.
   • Duflo, Esther (2000). "Child Health and Household Resources in South Africa: Evidence from the Old Age Pension Program," American Economic Review, 90(2): 393-398.
   • Duflo, Esther (2003). "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," World Bank Economic Review, 17(1): 1-25.

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Technical Lectures Syllabus

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1. Discrete Choice and Identification of Discrete Choice Models
• Handouts:
  • Discrete Dependent Variable Models
  • Classical Discrete Choice Theory
2. Factor Models and Counterfactuals
   • Abbring, Jaap and Heckman, James J. (2007). "Econometric Evaluation of Social Programs, Part III: Distributional Treatment Effects, Dynamic Treatment Effects, Dynamic Discrete Choice, and General Equilibrium Policy Evaluation." in Handbook of Econometrics, Vol. 6B, J. Heckman and E. Leamer, eds. Amsterdam: Elsevier. Section 2, pp. 5150 - 5209.
     • Handout for Abbring and Heckman (2007).
     • Notes on Factor Models and the Hicks Lecture Model with Normal Random Variables
3. Dynamic Discrete Choice and Counterfactuals
   • Abbring, Jaap and Heckman, James J. (2007). "Econometric Evaluation of Social Programs, Part III: Distributional Treatment Effects, Dynamic Treatment Effects, Dynamic Discrete Choice, and General Equilibrium Policy Evaluation." in Handbook of Econometrics, Vol. 6B, J. Heckman and E. Leamer, eds. Amsterdam: Elsevier. Section 3, pp. 5209-5274.
     • Handout for Abbring and Heckman (2007).
4. Models for Optimal Control
   • Handout: Convex (In Experience) Earnings Function
   • Handout: Sheshinski Specification
   • Handout: "Continuous Time, Finite Horizon: The Pontryagin Necessary Conditions,"from Arrow, K.J., and Kurz, M., Public Investment, the Rate of Return, and Optimal Fiscal Policy, Baltimore: Johns Hopkins Press, 1970. pp. 33–38.
• Generalized Ben-Porath Notes
5. Instrumental Variables
   • Heckman, James J.; Urzua, Sergio and Vytlacil, Edward J. (2006). "Understanding Instrumental Variables in Models with Essential Heterogeneity," Review of Economics and Statistics, 88(3): 389-432.
     • Handout for Heckman, Urzua and Vytlacil (2006).
   • Heckman, James J. and Vytlacil, Edward J. (2007). "Econometric Evaluation of Social Programs, Part I: Causal Models, Structural Models and Econometric Policy Evaluation," in Handbook of Econometrics, Vol. 6B, J. Heckman and E. Leamer, eds. Amsterdam: Elsevier. pp. 4779-4874.
     • Handout for Heckman and Vytlacil (2007), Part I.
   • Heckman, James J. and Vytlacil, Edward J. (2007). "Econometric Evaluation of Social Programs, Part II: Using the Marginal Treatment Effect to Organize Alternative Economic Estimators to Evaluate Social Programs and to Forecast Their Effects in New Environments," in Handbook of Econometrics, Vol. 6B, J. Heckman and E. Leamer, eds. Amsterdam: Elsevier. pp. 4875-5144.
     • Handout for Heckman and Vytlacil (2007), Part II.
6. Computation
   • Handout: Urzua, Sergio. (2008). "Introduction to Bayesian Methods, MCMC, and Gibbs Sampling."
   • Handout: Urzua, Sergio. (2008). "The Career Decisions of Young Men." based on Keane, M. and K. Wolpin (1997), "The Career Decisions of Young Men," Journal of Political Economy, 105(3), 473-522.
   • Handout: Urzua, Sergio. (2008). "Understanding the Role of Unobserved Heterogeneity."
   • Handout: Urzua, Sergio. (2008). "Estimating the Option Value of Schooling : A Discrete Dynamic Programming Approach Today: An Application to the GED."
7. Hedonic Models
   • Ekeland, Ivar, James J. Heckman and Lars Nesheim. (2004). "Identification and Estimation of Hedonic Models." Journal of Political Economy, 112(S1): S60-S109.
• Handout for Ekeland, Heckman and Nesheim (2004).
• Notes on Hedonic Models
• Shapley, L. S. and M. Shubik (1971). "The Assignment Game I: The Core." International Journal of Game Theory, 1(1): 111-130.
• Handout: Hedonic Models à la Tinbergen and Rosen (2007).
• Handout: Hedonic Models and Public Policy (2003).