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Treatment Effects with Heterogeneous Externalities

Tiziano Arduini (), Eleonora Patacchini and Edoardo Rainone ()

No 13781, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper proposes a new method for estimating heterogeneous externalities in policy analysis when social interactions take the linear-in-means form. We establish that the parameters of interest can be identified and consistently estimated using specific functions of the share of the eligible population. We also study the finite sample performance of the proposed estimators using Monte Carlo simulations. The method is illustrated using data on the PROGRESA program. We find that more than 50 percent of the effects of the program on schooling attendance are due to externalities, which are heterogeneous within and between poor and nonpoor households.

Keywords: Indirect Treatment E�ec; Program evaluation; Two-Stage Least Squares (search for similar items in EconPapers)
JEL-codes: C13 C21 D62 (search for similar items in EconPapers)
Date: 2019-06
New Economics Papers: this item is included in nep-ecm, nep-ore and nep-ure
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