A smooth difference-in-differences model for assessing gradual policy effects: Revisiting the impact of banking deregulation on income distribution

Zheng-Xin Wang and Yue-Qi Jv

Finance Research Letters, 2022, vol. 50, issue C

Abstract: A smooth difference-in-differences (smooth DID) method is proposed to revisit the effects of banking deregulation in the United States on income distribution. This simpler nonlinear DID model includes a smooth transition function (STF) to determine gradual policy effects on treatment groups. Based on economic implications and a series of tests, the impact of bank deregulation on gradually reducing income inequality is confirmed.

Keywords: Difference-in-differences model; Banking deregulation; Income distribution; Gradual policy effect (search for similar items in EconPapers)
JEL-codes: C10 C51 C54 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:50:y:2022:i:c:s1544612322004986

DOI: 10.1016/j.frl.2022.103319

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