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Treatment Effects in Market Equilibrium

Evan Munro, Xu Kuang, Stefan Wager

arXiv 23 Sep 2021 · Econometrics · publishedAmerican Economic Review (2025) · 14 citations (OpenAlex)

arXiv:2109.11647 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Policy-relevant treatment effect estimation in a marketplace setting requires taking into account both the direct benefit of the treatment and any spillovers induced by changes to the market equilibrium. The standard way to address these challenges is to evaluate interventions via cluster-randomized experiments, where each cluster corresponds to an isolated market. This approach, however, cannot be used when we only have access to a single market (or a small number of markets). Here, we show how to identify and estimate policy-relevant treatment effects using a unit-level randomized trial run within a single large market. A standard Bernoulli-randomized trial allows consistent estimation of direct effects, and of treatment heterogeneity measures that can be used for welfare-improving targeting. Estimating spillovers - as well as providing confidence intervals for the direct effect - requires estimates of price elasticities, which we provide using an augmented experimental design. Our results rely on all spillovers being mediated via the (observed) prices of a finite number of traded goods, and the market power of any single unit decaying as the market gets large. We illustrate our results using a simulation calibrated to a conditional cash transfer experiment in the Philippines.

Citation extraction

67
references
131
in-text mentions
67
distinct cited
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self-citations
14,984
main-text words

appendix boundary found by appendix_command · 43% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Sävje, Aronow \ Hudgens (2021) `Average treatment effects in the presence of unknown interference', The Annals of Statistics 49(2), 673–7011.00083100%
2Hu, Li \ Wager (2022) `Average treatment effects in the presence of interference', Biometrika (forthcoming)0.8746467%
3Filmer, Friedman, Kandpal \ Onishi (2023) `Cash Transfers, Food Prices, and Nutrition Impacts on Ineligible Children', The Review of Economics and Statistics 105(2), 327–…0.83817359%
4Baird, Bohren, McIntosh \ Özler (2018) `Optimal design of experiments in the presence of interference', Review of Economics and Statistics 100(5), 844–8600.73732100%
5Li \ Wager (2022) `Random graph asymptotics for treatment effect estimation under network interference', The Annals of Statistics 50(4), 2334–23580.73732100%
6van der Vaart \ Wellner (1996) Weak Convergence and Empirical Processes: With Applications to Statistics, Springer Science & Business Media0.64811427%
7Athey \ Imbens (2016) `Recursive partitioning for heterogeneous causal effects', Proceedings of the National Academy of Sciences 113(27), 7353–73600.64422100%
8Athey, Tibshirani \ Wager (2019) `Generalized random forests', The Annals of Statistics 47(2), 1148–11780.64422100%
9Carneiro, Heckman \ Vytlacil (2010) `Evaluating marginal policy changes and the average effect of treatment for individuals at the margin', Econometrica 78(1), 377–…0.64422100%
10Castillo (2023) Who benefits from surge pricing?0.64422100%

Showing the top 10 of 67 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Policy Learning with Competing Agents0.87452
2Decomposition of Spillover Effects Under Misspecification: Pseudo-True Estimands and a Local-Global Extension0.8703810
3Average Direct and Indirect Causal Effects under Interference0.64422
4Multiple Randomization Designs: Estimation and Inference with Interference0.64422
5Two-Sided Prioritized Ranking: A Coherency-Preserving Design for Marketplace Experiments0.64422
6Robust Network Targeting with Multiple Nash Equilibria0.58531
7Validating Causal Message Passing Against Network-Aware Methods on Real Experiments0.58531
8Switchback Price Experiments with Forward-Looking Demand0.51121
9On Evolution-Based Models for Experimentation Under Interference0.51121
10Treatment Allocation with Strategic Agents0.40511