On Causal Inference with Model-Based Outcomes
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arXiv
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| Autores principales: | , , |
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| Formato: | Preprint |
| Publicado: |
2024
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| _version_ | 1866915719381254144 |
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| author | Arkhangelsky, Dmitry Yanagimoto, Kazuharu Zohar, Tom |
| author_facet | Arkhangelsky, Dmitry Yanagimoto, Kazuharu Zohar, Tom |
| contents | We study the estimation of causal effects on group-level parameters identified from microdata (e.g., child penalties). We demonstrate that standard one-step methods (such as pooled OLS and IV regressions) are generally inconsistent due to an endogenous weighting bias, where the policy affects the implicit weights (e.g., altering fertility rates). In contrast, we advocate for a two-step Minimum Distance (MD) framework that explicitly separates parameter identification from policy evaluation. This approach eliminates the endogenous weighting bias and requires explicitly confronting sample selection when groups are small, thereby improving transparency. We show that the MD estimator performs well when parameters can be estimated for most groups, and propose a robust alternative that uses auxiliary information in settings with limited data. To illustrate the importance of this methodological choice, we evaluate the effect of the 2005 Dutch childcare reform on child penalties and find that the conventional one-step approach yields estimates that are substantially larger than those from the two-step method. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2403_19563 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | On Causal Inference with Model-Based Outcomes Arkhangelsky, Dmitry Yanagimoto, Kazuharu Zohar, Tom General Economics Economics We study the estimation of causal effects on group-level parameters identified from microdata (e.g., child penalties). We demonstrate that standard one-step methods (such as pooled OLS and IV regressions) are generally inconsistent due to an endogenous weighting bias, where the policy affects the implicit weights (e.g., altering fertility rates). In contrast, we advocate for a two-step Minimum Distance (MD) framework that explicitly separates parameter identification from policy evaluation. This approach eliminates the endogenous weighting bias and requires explicitly confronting sample selection when groups are small, thereby improving transparency. We show that the MD estimator performs well when parameters can be estimated for most groups, and propose a robust alternative that uses auxiliary information in settings with limited data. To illustrate the importance of this methodological choice, we evaluate the effect of the 2005 Dutch childcare reform on child penalties and find that the conventional one-step approach yields estimates that are substantially larger than those from the two-step method. |
| title | On Causal Inference with Model-Based Outcomes |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2403.19563 |