Abstract:Empirical welfare analyses often impose stringent parametric assumptions on individuals' preferences and neglect unobserved preference heterogeneity. In this paper, we develop a framework to conduct individual and social welfare analysis for discrete choice that does not suffer from these drawbacks. We first adapt the class of individual welfare measures introduced by Fleurbaey ( 2009) to settings where individual choice is discrete. Allowing for unrestricted, unobserved preference heterogeneity, these measure… Show more
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