Distributional Effects of a Continuous Treatment with an Application on Intergenerational Mobility

Brantly Callaway and Weige Huang

Oxford Bulletin of Economics and Statistics, 2020, vol. 82, issue 4, 808-842

Abstract: This paper considers the effect of a continuous treatment on the entire distribution of outcomes after adjusting for differences in the distribution of covariates across different levels of the treatment. Our methodology encompasses dose‐response functions, counterfactual distributions, and ‘distributional policy effects’ depending on the assumptions invoked by the researcher. We propose a three‐step estimator that consists of (i) estimating the distribution of the outcome conditional on the treatment and other covariates using quantile regression; (ii) for each value of the treatment, averaging over a counterfactual distribution of the covariates holding the treatment fixed; (iii) converting the resulting counterfactual distribution into parameters of interest that are easy to interpret. We show that our estimators converge uniformly to Gaussian processes and that the empirical bootstrap can be used to conduct uniformly valid inference across a range of values of the treatment. We use our method to study intergenerational income mobility where we consider effects of parents’ income on features of their child's income distribution such as (i) the fraction of children with income below the poverty line; (ii) the variance of child's income; and (iii) the inter‐quantile range of child's income–all as a function of parents’ income.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://doi.org/10.1111/obes.12355

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:bla:obuest:v:82:y:2020:i:4:p:808-842

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0305-9049

Access Statistics for this article

Oxford Bulletin of Economics and Statistics is currently edited by Christopher Adam, Anindya Banerjee, Christopher Bowdler, David Hendry, Adriaan Kalwij, John Knight and Jonathan Temple

More articles in Oxford Bulletin of Economics and Statistics from Department of Economics, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().