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Welfare Analysis Meets Causal Inference / Amy Finkelstein, Nathaniel Hendren.
- Format:
- Book
- Author/Creator:
- Finkelstein, Amy.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w27640.
- NBER working paper series no. w27640
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- We describe a framework for empirical welfare analysis that uses the causal estimates of a policy's impact on net government spending. This framework provides guidance for which causal effects are (and are not) needed for empirical welfare analysis of public policies.The key ingredient is the construction of each policy's marginal value of public funds (MVPF). The MVPF is the ratio of beneficiaries' willingness to pay for the policy to the net cost to the government. We discuss how the MVPF relates to "traditional" welfare analysis tools such as the marginal excess burden and marginal cost of public funds. We show how the MVPF can be used in practice by applying it to several canonical empirical applications from public finance, labor, development, trade, and industrial organization.
- Notes:
- Print version record
- August 2020.
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