Evaluating direct and indirect treatment effects in Italian R&D expenditures

Daniele Di Gennaro and Guido Pellegrini

MPRA Paper from University Library of Munich, Germany

Abstract: During the last decades SUTVA has represented the "gold standard" for the identification and evaluation of causal effects. However, the presence of interferences in causal analysis requires a substantial review of the SUTVA hypothesis. This paper proposes a framework for causal inference in presence of spatial interactions within a new spatial hierarchical Difference-in-Differences model (SH-DID). The novel approach decomposes the ATE, allowing the identification of direct (ADTE) and indirect treatment effects. In addition, our approach permits the identification of different indirect causal impact both on treated (AITET) and on controls (AITENT). The performances of the SH-DID are evaluated by a Montecarlo Simulation. The results confirm how omitting the presence of interferences produces biased parameters of direct and indirect effects, even though the estimates of the ATE in the traditional model are correct. Conversely, the SH-DID provides unbiased estimates of both total, direct and indirect effects. On this basis, we provide empirical evidence on the effectiveness of public policies in Italy. The estimates show the additionality of the policies on R&D expenditures. Decomposing the ATE, we demonstrate positive and significant direct effects, while the indirect impact is negative and meaningful, even if limited to the treated.

Keywords: policy evaluation; spatial interferences; spillover effects; spatial hierarchical approach (search for similar items in EconPapers)
JEL-codes: O38 R12 R15 R38 (search for similar items in EconPapers)
Date: 2016-12-20, Revised 2017-01-28
New Economics Papers: this item is included in nep-geo, nep-tid and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/76467/1/MPRA_paper_76467.pdf original version (application/pdf)

Related works:
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:pra:mprapa:76467

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().