Distribution and Quantile Structural Functions in Treatment Effect Models: Application to Smoking Effects on Wages

Yu-Chin Hsu, Kamhon Kan (kk@sinica.edu.tw) and Tsung-Chih Lai (d00323011@ntu.edu.tw)
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Tsung-Chih Lai: Department of Economics, National Taiwan University

No 15-A001, IEAS Working Paper : academic research from Institute of Economics, Academia Sinica, Taipei, Taiwan

Abstract: This paper examines the distribution structural functions (DSFs) and quantile structural functions (QSFs) in a semiparametric treatment effect model. The DSF and QSF are defined as the distribution function and quantile function of the counterfactural outcome when covariates are exogenously switched to a fixed value, while the unobserved heterogeneity of the whole population remains unchanged. We show that the DSFs and QSFs are identified under the unconfoundedness assumption, and then propose inverse probability weighted estimators which are n^{-1/2}-consistent and converge weakly to mean zero Gaussian processes. A simulation approach is also proposed to approximate the limiting processes. Finally, we apply the results to construct uniform confidence bands for the structural quantile treatment effect of smoking on wage, and find that smoking does not impose any wage penalty on male workers with low unobserved heterogeneity. JEL Classification: C14, C31, I19

Keywords: distribution structural function; semiparametric models; smoking; treatment effects; quantile structural function; wages (search for similar items in EconPapers)
Pages: 44 pages
Date: 2015-03, Revised 2016-04
New Economics Papers: this item is included in nep-ecm
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Citations: View citations in EconPapers (1)

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