@workingpaper {673602, title = {Unobserved Heterogeneity, State Dependence, and Health Plan Choices}, year = {Working Paper}, abstract = {We provide a new method to analyze discrete choice models with state dependence and individual-by-product fixed effects, and use it to analyze consumer choices in a policy-relevant environment (a subsidized health insurance exchange). Moment inequalities are used to infer state dependence from consumers{\textquoteright} switching choices in response to changes in product attributes. We infer much smaller switching costs on the health insurance exchange than is inferred from standard logit and/or random effects methods. A counterfactual policy evaluation\  illustrates that the policy implications of this difference can be substantive.}, url = {https://www.nber.org/papers/w29025}, author = {Ariel Pakes and Jack Porter and Mark Shepard and Calder-Wang, Sophie} }