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Distributional Treatment Effect with Latent Rank Invariance

Myungkou Shin

arXiv 27 Mar 2024 · Econometrics

arXiv:2403.18503 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Treatment effect heterogeneity is of a great concern when evaluating policy impact: "is the treatment Pareto-improving?", "what is the proportion of people who are better off under the treatment?", etc. However, even in the simple case of a binary random treatment, existing analysis has been mostly limited to an average treatment effect or a quantile treatment effect, due to the fundamental limitation that we cannot simultaneously observe both treated potential outcome and untreated potential outcome for a given unit. This paper assumes a conditional independence assumption that the two potential outcomes are independent of each other given a scalar latent variable. With a specific example of strictly increasing conditional expectation, I label the latent variable as 'latent rank' and motivate the identifying assumption as 'latent rank invariance.' In implementation, I assume a finite support on the latent variable and propose an estimation strategy based on a nonnegative matrix factorization. A limiting distribution is derived for the distributional treatment effect estimator, using Neyman orthogonality.

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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
1Jones, Molitor and Reif (2019) What do workplace wellness programs do? Evidence from the Illinois workplace wellness study1.000134100%
2Hu and Schennach (2008) Instrumental variable treatment of nonclassical measurement error models0.79410450%
3Carneiro, Hansen and Heckman (2003) 2001 Lawrence R. Klein Lecture Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and…0.73732100%
4Henry, Kitamura and Salanié (2014) Partial identification of finite mixtures in econometric models0.73732100%
5Cunha, Heckman and Schennach (2010) Estimating the technology of cognitive and noncognitive skill formation0.69351100%
6Fan and Park (2010) Sharp bounds on the distribution of treatment effects and their statistical inference0.64422100%
7Hu (2008) Identification and estimation of nonlinear models with misclassification error using instrumental variables: A general solution0.5112250%
8Deaner (2023) Proxy controls and panel data0.51121100%
9Kedagni (2023) Identifying treatment effects in the presence of confounded types0.51121100%
10Miao, Geng and Tchetgen Tchetgen (2018) Identifying causal effects with proxy variables of an unmeasured confounder0.51121100%

Showing the top 10 of 37 scored citations.