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Policy Choice in Time Series by Empirical Welfare Maximization

Toru Kitagawa, Weining Wang, Mengshan Xu

arXiv 8 May 2022 · Econometrics · 1 citations (OpenAlex)

arXiv:2205.03970 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper develops a novel method for policy choice in a dynamic setting where the available data is a multi-variate time series. Building on the statistical treatment choice framework, we propose Time-series Empirical Welfare Maximization (T-EWM) methods to estimate an optimal policy rule by maximizing an empirical welfare criterion constructed using nonparametric potential outcome time series. We characterize conditions under which T-EWM consistently learns a policy choice that is optimal in terms of conditional welfare given the time-series history. We derive a nonasymptotic upper bound for conditional welfare regret. To illustrate the implementation and uses of T-EWM, we perform simulation studies and apply the method to estimate optimal restriction rules against Covid-19.

Citation extraction

68
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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
1I. Bojinov and N. Shephard (2019) Time series experiments and causal estimands: exact randomization tests and trading1.000143100%
2T. Kitagawa and A. Tetenov (2018) Who should be treated? Empirical welfare maximization methods for treatment choice0.9209578%
3C. F. Manski (2004) Statistical treatment rules for heterogeneous populations0.87482100%
4S. Athey and S. Wager (2021) Policy learning with observational data0.84333100%
5T. Kitagawa, S. Sakaguchi, and A. Tetenov (2021) Constrained classification and policy learning0.73732100%
6J. D. Angrist, Ò. Jordà, and G. M. Kuersteiner (2018) Semiparametric estimates of monetary policy effects: string theory revisited0.73732100%
7A. Rambachan and N. Shepherd (2021) When do common time series estimands have nonparametric causal meaning?0.73732100%
8L. Kallenberg (2016) Markov decision processes0.6443267%
9E. Mbakop and M. Tabord-Meehan Model selection for treatment choice: Penalized welfare maximization0.64422100%
10S. Sakaguchi (2021) Estimation of optimal dynamic treatment assignment rules under policy constraint0.64422100%

Showing the top 10 of 68 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
1Bandit Algorithms for Policy Learning: Methods, Implementation, and Welfare-performance0.40511
2Robust Network Targeting with Multiple Nash Equilibria0.40511
3Dynamic Causal Effects in a Nonlinear World: the Good, the Bad, and the Ugly0.40511
4Nonlinearity in Dynamic Causal Effects: Making the Bad into the Good, and the Good into the Great?0.40511
5When are time series predictions causal? The potential system and dynamic causal effects0.40511