Causal Inference on Networks Under Continuous Treatment Interference: An Application to Trade Distortions in Agricultural Markets

31 Pages Posted: 24 Apr 2019

See all articles by Davide Del Prete

Davide Del Prete

University of Naples "Parthenope"

Laura Forastiere

Yale University - Yale Institute for Network Science

Valerio Leone Sciabolazza

University of Florida

Date Written: March 31, 2019

Abstract

Extensive work has been done to assess the role played by externalities in policy interventions. Studies dealing with this issue in experimental settings abound in the literature. Much less attention, however, has been devoted to the case when data comes from observational studies. In this paper, we address this gap by presenting a methodology to draw causal inference in a non-experimental setting subject to interference. Specifically, we develop a generalized propensity score-based estimator that allows estimating both direct and spillover effects of a continuous treatment. In order to showcase this methodology, we investigate whether and how spillover effects shape the optimal level of producers' support in agricultural markets. Our results show that, in this context, neglecting interference may lead to a downward bias when assessing policy effectiveness.

Keywords: causal inference, networks, continuous treatment interference, agricultural incentives, trade distortions

JEL Classification: C21, F14, F60, L14, Q17

Suggested Citation

Del Prete, Davide and Forastiere, Laura and Leone Sciabolazza, Valerio, Causal Inference on Networks Under Continuous Treatment Interference: An Application to Trade Distortions in Agricultural Markets (March 31, 2019). Available at SSRN: https://ssrn.com/abstract=3363173 or http://dx.doi.org/10.2139/ssrn.3363173

Davide Del Prete (Contact Author)

University of Naples "Parthenope" ( email )

Via generale parisi
Naples, Naples 80133
Italy

Laura Forastiere

Yale University - Yale Institute for Network Science ( email )

United States

Valerio Leone Sciabolazza

University of Florida ( email )

PO Box 117165, 201 Stuzin Hall
Gainesville, FL 32610-0496
United States

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