A Microeconometric Comparison of Household Behavior Between Countries

This article reviews the methodological issues associated with estimating and testing competitive markets with panel data and applies it to an important new arena, international economics. We investigate differences in housing consumption and male labor supply across households in Germany and the United States with data from the German Socio Economic Panel and the Panel Study of Income Dynamics. Observations are treated as equilibrium outcomes, generated by a set of competitive markets that accommodate varying degrees of integration. After controlling for differences in the sample populations and aggregate shocks, we find that the estimated structural parameters are surprisingly similar across these two countries.