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Identifying Causal Effects under Kink Setting: Theory and Evidence

Yi Lu, Jianguo Wang, Huihua Xie

arXiv 14 Apr 2024 · Econometrics

arXiv:2404.09117 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper develops a generalized framework for identifying causal impacts in a reduced-form manner under kinked settings when agents can manipulate their choices around the threshold. The causal estimation using a bunching framework was initially developed by Diamond and Persson (2017) under notched settings. Many empirical applications of bunching designs involve kinked settings. We propose a model-free causal estimator in kinked settings with sharp bunching and then extend to the scenarios with diffuse bunching, misreporting, optimization frictions, and heterogeneity. The estimation method is mostly non-parametric and accounts for the interior response under kinked settings. Applying the proposed approach, we estimate how medical subsidies affect outpatient behaviors in China.

Citation extraction

16
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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
1Raj Chetty, John N Friedman, Tore Olsen, and Luigi Pistaferri (2011) Adjustment costs, firm responses, and micro vs. macro labor supply elasticities: Evidence from Danish tax records0.69351100%
2Rebecca Diamond and Petra Persson (2017) The long-term consequences of teacher discretion in grading of high-stakes tests0.58531100%
3Henrik J Kleven and Mazhar Waseem (2013) Using notches to uncover optimization frictions and structural elasticities: Theory and evidence from pakistan0.51121100%
4Emmanuel Saez (2010) Do taxpayers bunch at kink points?0.51121100%
5Michael Carlos Best and Henrik Jacobsen Kleven (2018) Housing market responses to transaction taxes: Evidence from notches and stimulus in the UK0.40511100%
6Michael Carlos Best, James S Cloyne, Ethan Ilzetzki, and Henrik J Kl… (2020) Estimating the elasticity of intertemporal substitution using mortgage notches0.40511100%
7Sören Blomquist, Whitney K Newey, Anil Kumar, and Che-Yuan Liang (2021) On bunching and identification of the taxable income elasticity0.40511100%
8Carolina Caetano (2015) A test of exogeneity without instrumental variables in models with bunching0.40511100%
9Carolina Caetano, Gregorio Caetano, and Eric Nielsen (2023) Correcting for endogeneity in models with bunching0.40511100%
10Pedro Carneiro, Katrine V Lken, and Kjell G Salvanes (2015) A flying start? maternity leave benefits and long-run outcomes of children0.40511100%

Showing the top 10 of 16 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
1Identification of Causal Effects with a Bunching Design0.40511