This research was supported by NIH R01-HD32058-3, NSF SES-0832845, NSF SES-024158, NSF SES-05-51089, ESRC RES-000-22-2542, the Geary Institute at University College Dublin, the American Bar Foundation, the Pritzker Consortium on Early Childhood Development, the Leverhulme Trust, and ESRC (RES-589-28-0001) through the funding of the Centre for Microdata Methods and Practice. The research was conducted in part while Edward Vytlacil was a Visiting Professor at Hitotsubashi University. We thank the editor, two anonymous referees, Hidehiko Ichimura, Richard Robb, Daniel Schmierer, and Azeem Shaikh for very helpful comments. We would like to thank Erica Blom and Sukjin Han for research assistance.
Evaluating Marginal Policy Changes and the Average Effect of Treatment for Individuals at the Margin
Version of Record online: 8 FEB 2010
© 2010 The Econometric Society
Volume 78, Issue 1, pages 377–394, January 2010
How to Cite
Carneiro, P., Heckman, J. J. and Vytlacil, E. (2010), Evaluating Marginal Policy Changes and the Average Effect of Treatment for Individuals at the Margin. Econometrica, 78: 377–394. doi: 10.3982/ECTA7089
- Issue online: 8 FEB 2010
- Version of Record online: 8 FEB 2010
- Manuscript received April, 2007; final revision received July, 2009.
- Marginal treatment effect;
- effects of marginal policy changes;
- marginal policy relevant treatment effect;
- average marginal treatment effect
This paper develops methods for evaluating marginal policy changes. We characterize how the effects of marginal policy changes depend on the direction of the policy change, and show that marginal policy effects are fundamentally easier to identify and to estimate than conventional treatment parameters. We develop the connection between marginal policy effects and the average effect of treatment for persons on the margin of indifference between participation in treatment and nonparticipation, and use this connection to analyze both parameters. We apply our analysis to estimate the effect of marginal changes in tuition on the return to going to college.