A1264
Title: Heterogeneous effects of endogenous treatments with interference and spillovers in a large network
Authors: Lin Chen - Vanderbilt University (United States) [presenting]
Yuya Sasaki - Vanderbilt University (United States)
Abstract: The identification and estimation of heterogeneous effects of an endogenous treatment under interference and spillovers in a large single-network setting is studied. Endogenous treatment selection is modeled as an equilibrium outcome that explicitly accounts for spillovers and conditions guaranteeing the existence and uniqueness of this equilibrium are derived. Heterogeneous marginal exposure effects (MEEs), which may vary with both the treatment status of neighboring nodes and unobserved heterogeneity, are then identified. Estimation strategies are developed and their large-sample properties established. Equipped with these tools, the heterogeneous effects of import competition on U.S. local labor markets in the presence of interference and spillovers are analyzed. Negative MEEs are found, consistent with the existing literature. However, these effects are amplified by spillovers in the presence of treated neighbors and among localities that tend to select into lower levels of import competition. These additional empirical findings are novel and would not be credibly obtainable without the econometric framework proposed.
