Testable Comparative Statics with Spillovers

Finn Christensen

No 2023-08, Working Papers from Towson University, Department of Economics

Abstract: Comparative statics generates qualitative predictions, but these predictions are rarely expressed as empirically identifiable average effects. This paper develops testable comparative statics for environments with spillovers. Standard difference-in-differences and difference-in-means estimands identify MATTS, the Marginal Average Treatment Effect on the Treated with Spillovers. I characterize when equilibrium theory signs MATTS: assignment-robust nonnegativity holds exactly when the negated Jacobian inverse is a B_{0}-matrix by columns. The results globalize local comparative statics to finite treatments and show how reduced-form evidence can evaluate model-implied sign predictions in interacting economic systems.

Keywords: Comparative statics; equilibrium analysis; spillovers; interference; difference-in-differences; randomized controlled trials; B-matrix; testable predictions; treatment effects; MATTS. (search for similar items in EconPapers)
JEL-codes: C12 C18 C72 D43 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2023-11, Revised 2026-06
New Economics Papers: this item is included in nep-ecm
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Persistent link: https://EconPapers.repec.org/RePEc:tow:wpaper:2023-08

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