STICERD Econometrics Seminar Series & STICERD Econometrics Seminar Series
Demand and Welfare Analysis in Discrete Choice Models with Social Interactions
Shin Kanaya (University of Essex), joint with Debopam Bhattacharya and Pascaline Dupas
Thursday 18 November 2021 14:00 - 15:30
Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.
Unless otherwise specified, in-person seminars are open to the public.
Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.
About this event
Many real-life settings of individual choice involve social interactions, causing targeted policies to have spillover effects. This paper develops novel empirical tools for analyzing demand and welfare effects of policy interventions in binary choice settings with social interactions. Examples include subsidies for health product adoption and vouchers for attending a high-achieving school. We show that even with fully parametric specifications and unique equilibrium, choice data, that are sufficient for counterfactual demand prediction under interactions, are insufficient for welfare calculations. This is because distinct underlying mechanisms producing the same interaction coefficient can imply different welfare effects and deadweight-loss from a policy intervention. Standard index restrictions imply distribution-free bounds on welfare. We propose ways to identify and consistently estimate the structural parameters and welfare bounds allowing for unobserved group effects that are potentially correlated with observables and are possibly unbounded. We illustrate our results using experimental data on mosquito-net adoption in rural Kenya.
STICERD Econometrics seminars are held on Thursdays in term time at 14.00-15.30, in SAL 3.05, unless specified otherwise.
Seminar organisers: Dr Yike Wang, Professor Tai Otsu, and Dr Vassilis Hajivassiliou.
For further information please contact Sadia Ali: s.ali43@lse.ac.uk.
Please use this link to subscribe or unsubscribe to STICERD Econometrics mailing list (emetrics).
STICERD Econometrics seminars are held on Thursdays in term time at 14.00-15.30, in SAL 3.05, unless specified otherwise.
Seminar organisers: Dr Yike Wang, Professor Tai Otsu, and Dr Vassilis Hajivassiliou.
For further information please contact Sadia Ali: s.ali43@lse.ac.uk.
Please use this link to subscribe or unsubscribe to STICERD Econometrics mailing list (emetrics).