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Taking an Extra Moment to Consider Treatment Effects on Distributions

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Abstract

This paper introduces Parameter Estimation by Raw Moments (PERM), a flexible method for evaluating a policy’s impact on the parameters of an outcome distribution. Such parameters include the variance, skewness and covariance of two outcomes. PERM simplifies distributional analysis by first separately estimating higher-order moment treatment effects, then combining these to derive distribution parameter treatment effects. Two implementations are discussed: regression with controls and DiD with staggered roll-out. Applying PERM DiD to a Swedish school reform finds it reduced education inequality but increased earnings variance resulting in a lower covariance between education and earnings.

Suggested Citation

  • Heckley, Gawain & Petrie, Dennis, 2025. "Taking an Extra Moment to Consider Treatment Effects on Distributions," Working Papers 2025:4, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2025_004
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    More about this item

    Keywords

    Causal Inference; Policy Evaluation; Distribution Impacts; Income Inequality; Education Inequality;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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