The Importance of Base-Rates in Differential Impact: A Bail Reform Case-Study

Aurélie Ouss and Megan T. Stevenson

Journal of Institutional and Theoretical Economics (JITE), 2025, vol. 181, issue 1, 139-155

Abstract: Researchers commonly seek to understand whether a policy has differential impact on different subgroups, yet the choice of differential impact metric can have a huge effect on interpretation. Commonly used metrics, such as comparing treatment effects in magnitude or as a percentage of the control mean, frequently do not correspond to the question of interest. If the relevant question is how the intervention affected potential beneficiaries of the reform, a different base rate must be used. We demonstrate how to implement a base-rate adjusted impact metric in a difference-in-differences setting using Philadelphia bail reform as an example.

Keywords: bail reform; differential impact; racial disparities (search for similar items in EconPapers)
JEL-codes: D63 K14 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1628/jite-2025-0008

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