Structural Characterizations of Marginal Policy Effects

Zhixin Wang, Yu Zhang and Zhengyu Zhang

Papers from arXiv.org

Abstract: This paper investigates the structural interpretation of the marginal policy effect (MPE) within nonseparable models. We demonstrate that, for a smooth functional of the outcome distribution, the MPE equals its functional derivative evaluated at the outcome-conditioned weighted average structural derivative. This equivalence is definitional rather than identification-based. Building on this theoretical result, we propose an alternative identification strategy for the MPE that complements existing methods.

Date: 2025-06
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