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Dynamic Bunching Estimation with Panel Data

Author

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  • Marx Benjamin M.

    (Department of Economics, 14589 University of Illinois at Urbana-Champaign , 1407 W. Gregory, Urbana, IL 61801, USA)

Abstract

Bunching estimation of distortions in a distribution around a policy threshold provides a means of studying behavioral parameters. Standard cross-sectional bunching estimators rely on identification assumptions about heterogeneity that I show can be violated by serial dependence of the choice variable or attrition related to the threshold. I propose a bunching estimation design that exploits panel data to obtain identification from relative within-agent changes in income and to estimate new parameters. Simulations using household income data demonstrate the benefits of the panel design. An application to charitable organizations demonstrates opportunities for estimating elasticity correlates, causal effects, and extensive-margin responses.

Suggested Citation

  • Marx Benjamin M., 2024. "Dynamic Bunching Estimation with Panel Data," Journal of Econometric Methods, De Gruyter, vol. 13(2), pages 225-249.
  • Handle: RePEc:bpj:jecome:v:13:y:2024:i:2:p:225-249:n:1002
    DOI: 10.1515/jem-2022-0031
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    2. Homonoff, Tatiana & Willage, Barton & Willén, Alexander, 2020. "Rebates as incentives: The effects of a gym membership reimbursement program," Journal of Health Economics, Elsevier, vol. 70(C).
    3. Aronsson, Thomas & Jenderny, Katharina & Lanot, Gauthier, 2022. "The quality of the estimators of the ETI," Journal of Public Economics, Elsevier, vol. 212(C).
    4. Marx, Benjamin M., 2018. "The Cost of Requiring Charities to Report Financial Information," MPRA Paper 88660, University Library of Munich, Germany.
    5. Rodrigo Carril, 2021. "Rules Versus Discretion in Public Procurement," Working Papers 1232, Barcelona School of Economics.

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    More about this item

    Keywords

    longitudinal; serial dependency; extensive margin; causal;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation

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