Partial Identification, Distributional Preferences, and the Welfare Ranking of Policies

Maximilian Kasy

The Review of Economics and Statistics, 2016, vol. 98, issue 1, 111-131

Abstract: We discuss the tension between “what we can get” (identification) and “what we want” (parameters of interest) in models of policy choice (treatment assignment). Our nonstandard empirical object of interest is the ranking of counterfactual policies. Partial identification of treatment effects maps into a partial welfare ranking of treatment assignment policies. We characterize the identified ranking and show how the identifiability of the ranking depends on identifying assumptions, the feasible policy set, and distributional preferences. An application to the project STAR experiment illustrates this dependence. This paper connects the literatures on partial identification, robust statistics, and choice under Knightian uncertainty.

Keywords: Partial identification; ambiguity; distributional decompositions; robust statistics; treatment assignment (search for similar items in EconPapers)
JEL-codes: C18 C21 C44 D04 D61 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (24)

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