Debopam Bhattacharya, Pascaline Dupas, Shin Kanaya
arXiv 10 May 2019 · Econometrics · publishedThe Review of Economic Studies (2023) · 13 citations (OpenAlex)
arXiv:1905.04028 · PDF · DOI · OpenAlex · Extracted main text
Many real-life settings of consumer-choice involve social interactions, causing targeted policies to have spillover-effects. This paper develops novel empirical tools for analyzing demand and welfare-effects of policy-interventions in binary choice settings with social interactions. Examples include subsidies for health-product adoption and vouchers for attending a high-achieving school. We establish the connection between econometrics of large games and Brock-Durlauf-type interaction models, under both I.I.D. and spatially correlated unobservables. We develop new convergence results for associated beliefs and estimates of preference-parameters under increasing-domain spatial asymptotics. Next, we show that even with fully parametric specifications and unique equilibrium, choice data, that are sufficient for counterfactual demand-prediction under interactions, are insufficient for welfare-calculations. This is because distinct underlying mechanisms producing the same interaction coefficient can imply different welfare-effects and deadweight-loss from a policy-intervention. Standard index-restrictions imply distribution-free bounds on welfare. We illustrate our results using experimental data on mosquito-net adoption in rural Kenya.
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arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | Policy Targeting under Network Interference | 0.405 | 1 | 1 |
| 2 | Identifying Causal Effects in Experiments with Spillovers and Non-compliance | 0.405 | 1 | 1 |
| 3 | Heterogeneity in peer effects for binary outcomes | 0.405 | 1 | 1 |
| 4 | When “Normalization Without Loss of Generality” Loses Generality | 0.405 | 1 | 1 |