[go: up one dir, main page]

  EconPapers    
Economics at your fingertips  
 

Non-Random Exposure to Exogenous Shocks: Theory and Applications

Kirill Borusyak and Peter Hull

No 2020-130, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: We develop new tools for estimating the causal effects of treatments or instruments that combine multiple sources of variation according to a known formula. Examples include treatments capturing spillovers in social and transportation networks, simulated instruments for policy eligibility, and shift-share instruments. We show how exogenous shocks to some, but not all, determinants of such variables can be leveraged while avoiding omitted variables bias. Our solution involves specifying counterfactual shocks that may as well have been realized and adjusting for a summary measure of non-randomness in shock exposure: the average treatment (or instrument) across such counterfactuals. We further show how to use shock counterfactuals for valid finite-sample inference, and characterize the valid instruments that are asymptotically efficient. We apply this framework to address bias when estimating employment effects of market access growth from Chinese high-speed rail construction, and to boost power when estimating coverage effects of expanded Medicaid eligibility.

Pages: 119 pages
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Downloads: (external link)
https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_2020130.pdf (application/pdf)

Related works:
Working Paper: Non-Random Exposure to Exogenous Shocks: Theory and Applications (2020) Downloads
Working Paper: Non-Random Exposure to Exogenous Shocks: Theory and Applications (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bfi:wpaper:2020-130

Access Statistics for this paper

More papers in Working Papers from Becker Friedman Institute for Research In Economics Contact information at EDIRC.
Bibliographic data for series maintained by Toni Shears ( this e-mail address is bad, please contact ).

 
Page updated 2024-12-20
Handle: RePEc:bfi:wpaper:2020-130