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Quantile Random-Coefficient Regression with Interactive Fixed Effects: Heterogeneous Group-Level Policy Evaluation

Ruofan Xu, Jiti Gao, Tatsushi Oka, Yoon-Jae Whang

arXiv 7 Aug 2022 · Econometrics · publishedEconometric Reviews (2024)

arXiv:2208.03632 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a quantile random-coefficient regression with interactive fixed effects to study the effects of group-level policies that are heterogeneous across individuals. Our approach is the first to use a latent factor structure to handle the unobservable heterogeneities in the random coefficient. The asymptotic properties and an inferential method for the policy estimators are established. The model is applied to evaluate the effect of the minimum wage policy on earnings between 1967 and 1980 in the United States. Our results suggest that the minimum wage policy has significant and persistent positive effects on black workers and female workers up to the median. Our results also indicate that the policy helps reduce income disparity up to the median between two groups: black, female workers versus white, male workers. However, the policy is shown to have little effect on narrowing the income gap between low- and high-income workers within the subpopulations.

Citation extraction

45
references
94
in-text mentions
45
distinct cited
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main-text words

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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
1Derenoncourt, E. and C. Montialoux (2021) Minimum wages and racial inequality0.95014486%
2Bai, J (2009) Panel data models with interactive fixed effects0.92314579%
3Chetverikov, D., B. Larsen, and C. Palmer (2016) IV quantile regression for group–level treatments, with an application to the distributional effects of trade0.8558562%
4Ando, T. and J. Bai (2020) Quantile co-movement in financial markets: a panel quantile model with unobserved heterogeneity0.84333100%
5Gobillon, L. and T. Magnac (2016) Regional policy evaluation: interactive fixed effects and synthetic controls0.81142100%
6Card, D. and A. B. Krueger (1992) School quality and black-white relative earnings: a direct assessment0.7373367%
7Chen, L., J. J. Dolado, and J. Gonzalo (2021) Quantile factor models0.7373367%
8Koenker, R. and J. G. Bassett (1978) Regression quantiles0.73732100%
9Jiang, B., Y. Yang, J. Gao, and C. Hsiao (2021) Recursive estimation in large panel data models: theory and practice0.6444250%
10Arellano, M. and S. Bonhomme (2016) Nonlinear panel data estimation via quantile regressions0.64422100%

Showing the top 10 of 45 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
1On Efficient Estimation of Distributional Treatment Effects under Covariate-Adaptive Randomization0.40511