Essays on Causal Inference for Public Policy

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Essays on Causal Inference for Public Policy

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Title: Essays on Causal Inference for Public Policy
Author: Zajonc, Tristan
Citation: Zajonc, Tristan. 2012. Essays on Causal Inference for Public Policy. Doctoral dissertation, Harvard University.
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Abstract: Effective policymaking requires understanding the causal effects of competing proposals. Relevant causal quantities include proposals' expected effect on different groups of recipients, the impact of policies over time, the potential trade-offs between competing objectives, and, ultimately, the optimal policy. This dissertation studies causal inference for public policy, with an emphasis on applications in economic development and education. The first chapter introduces Bayesian methods for time-varying treatments that commonly arise in economics, health, and education. I present methods that account for dynamic selection on intermediate outcomes and can estimate the causal effect of arbitrary dynamic treatment regimes, recover the optimal regime, and characterize the set of feasible outcomes under different regimes. I demonstrate these methods through an application to optimal student tracking in ninth and tenth grade mathematics. The proposed estimands characterize outcomes, mobility, equity, and efficiency under different tracking regimes. The second chapter studies regression discontinuity designs with multiple forcing variables. Leading examples include education policies where treatment depends on multiple test scores and spatial treatment discontinuities arising from geographic borders. I give local linear estimators for both the conditional effect along the boundary and the average effect over the boundary. For two-dimensional RD designs, I derive an optimal, data-dependent, bandwidth selection rule for the conditional effect. I demonstrate these methods using a summer school and grade retention example. The third chapters illustrate the central role of persistence in estimating and interpreting value-added models of learning. Using data from Pakistani public and private schools, I apply dynamic panel methods that address three key empirical challenges: imperfect persistence, unobserved student heterogeneity, and measurement error. After correcting for these difficulties, the estimates suggest that only a fifth to a half of learning persists between grades and that private schools increase average achievement by 0.25 standard deviations each year. In contrast, value-added models that assume perfect persistence yield severely downwardly biased and occasionally wrong-signed estimates of the private school effect.
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