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Dynamic Spatial Treatment Effect Boundaries: A Continuous Functional Framework from Navier-Stokes Equations

Tatsuru Kikuchi

arXiv 16 Oct 2025 · Econometrics

arXiv:2510.14409 · PDF · Extracted main text

Abstract

I develop a comprehensive theoretical framework for dynamic spatial treatment effect boundaries using continuous functional definitions grounded in Navier-Stokes partial differential equations. Rather than discrete treatment effect estimators, the framework characterizes treatment intensity as a continuous function $τ(\mathbf{x}, t)$ over space-time, enabling rigorous analysis of propagation dynamics, boundary evolution, and cumulative exposure patterns. Building on exact self-similar solutions expressible through Kummer confluent hypergeometric and modified Bessel functions, I establish that treatment effects follow scaling laws $τ(d, t) = t^{-α} f(d/t^β)$ where exponents characterize diffusion mechanisms. Empirical validation using 42 million TROPOMI satellite observations of NO$_2$ pollution from U.S. coal-fired power plants demonstrates strong exponential spatial decay ($κ_s = 0.004$ per km, $R^2 = 0.35$) with detectable boundaries at 572 km. Monte Carlo simulations confirm superior performance over discrete parametric methods in boundary detection and false positive avoidance (94% vs 27% correct rejection). Regional heterogeneity analysis validates diagnostic capability: positive decay parameters within 100 km confirm coal plant dominance; negative parameters beyond 100 km correctly signal when urban sources dominate. The continuous functional perspective unifies spatial econometrics with mathematical physics, providing theoretically grounded methods for boundary detection, exposure quantification, and policy evaluation across environmental economics, banking, and healthcare applications.

Citation extraction

19
references
28
in-text mentions
17
distinct cited
5
self-citations
15,157
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
1Müller, U. K., & Watson, M. W (2024) Spatial unit roots and spurious regression1.00075100%
2Müller, U. K., & Watson, M. W (2022) Spatial correlation robust inference1.00053100%
3Kikuchi, T (2024) A unified framework for spatial and temporal treatment effect boundaries: Theory and identification self0.64422100%
4Abramowitz, M., & Stegun, I. A (1964) Handbook of Mathematical Functions with Formulas, Graphs, and Mathematical Tables0.40511100%
5Angrist, J. D., & Kolesár, M (2022) One instrument to rule them all: The bias and coverage of just-ID IV0.40511100%
6Anselin, L (1988) Spatial Econometrics: Methods and Models0.40511100%
7Athey, S., & Imbens, G. W (2017) The econometrics of randomized experiments0.40511100%
8Butts, K., & Gardner, J (2023) Difference-in-differences with spatial spillovers0.40511100%
9Conley, T. G (1999) GMM estimation with cross sectional dependence0.40511100%
10Deaton, A (2010) Understanding the mechanisms of economic development0.40511100%

Showing the top 10 of 17 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
1Dual-Channel Technology Diffusion: Spatial Decay and Network Contagion in Supply Chain Networks1.000257
2Dynamic Spatial Treatment Effects and Network Fragility: Theory and Evidence from the 2008 Financial Crisis1.00094
3Dynamic Spatial Treatment Effects as Continuous Functionals: Theory and Evidence from Healthcare Access1.00063
4Network Contagion Dynamics in European Banking: A Navier-Stokes Framework for Systemic Risk Assessment1.00063
5Emergent Dynamical Spatial Boundaries in Emergency Medical Services: A Navier-Stokes Framework from First Principles0.87472