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David Powell

Selected Works

Articles 1 - 5 of 5

Full-Text Articles in Econometrics

Imperfect Synthetic Controls: Did The Massachusetts Health Care Reform Save Lives?, David Powell Dec 2017

Imperfect Synthetic Controls: Did The Massachusetts Health Care Reform Save Lives?, David Powell

David Powell

In 2006, Massachusetts enacted comprehensive health care reform which served as a model for the Affordable Care Act. I study the mortality effects of the reform using synthetic control estimation, relaxing two critical assumptions required to implement this method.  The traditional approach assumes the existence of a perfect synthetic control, which cannot exist if the outcomes of the treated unit are outside of the "convex hull" or functions of transitory shocks.  I propose simple modifications to relax these restrictions.  The new estimator outperforms the traditional method in simulations.   I estimate that the Massachusetts Health Care Reform reduced mortality by 3%.

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Panel Data Inference With Dependent Clusters, David Powell Dec 2016

Panel Data Inference With Dependent Clusters, David Powell

David Powell

This paper introduces a method which permits valid inference given a finite number of heterogeneous, correlated clusters. The method relies on a test statistic using the mean of the cluster-specific scores normalized by the variance and simulating the distribution of this statistic.  While many inference methods assume clusters are asymptotically independent or model dependence across clusters as a function of a distance metric, this paper estimates cross-cluster dependence by studying co-movements between clusters and then isolating the independent component of each cluster.  The method is simple to implement, can be employed for linear and nonlinear estimators, places no restrictions on …

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Synthetic Control Estimation Beyond Case Studies: Does The Minimum Wage Reduce Employment?, David Powell Dec 2016

Synthetic Control Estimation Beyond Case Studies: Does The Minimum Wage Reduce Employment?, David Powell

David Powell

Panel data are often used in empirical work to account for fixed additive time and unit effects.  The synthetic control estimator relaxes the assumption of additive effects for case studies in which a treated unit adopts a single policy.  This paper generalizes the case study synthetic control estimator to estimate treatment effects for multiple discrete or continuous variables, jointly estimating the treatment effects and synthetic controls for each unit.  Applying the estimator to study the disemployment effects of the minimum wage for teenagers, I estimate an elasticity of -0.44, substantially larger in magnitude than estimates generated using additive fixed effects.

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Quantile Regression With Nonadditive Fixed Effects, David Powell Jan 2016

Quantile Regression With Nonadditive Fixed Effects, David Powell

David Powell

This paper introduces a quantile regression estimator for panel data (QRPD) with nonadditive fixed effects, maintaining the nonseparable disturbance term commonly associated with quantile estimation. QRPD estimates the impact of exogenous or endogenous treatment variables on the outcome distribution using ``within" variation in the treatment variables or instruments for identification purposes. Most quantile panel data estimators include additive fixed effects which separates the disturbance term and assumes the parameters vary based only on the time-varying components of the disturbance term. QRPD is consistent for small T and straightforward to implement. The nonadditive fixed effects are never estimated or even specified. …

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Does Labor Supply Respond To Transitory Income? Evidence From The Economic Stimulus Payments Of 2008, David Powell Jan 2015

Does Labor Supply Respond To Transitory Income? Evidence From The Economic Stimulus Payments Of 2008, David Powell

David Powell

Tax policy is often used to encourage consumer spending in recessions and a growing literature finds evidence that households increase short-term spending in response to receipt of tax rebates. The literature has largely ignored the effect on labor supply as rebates may crowd out labor earnings and households may consume additional leisure. The responsiveness of labor supply to transitory income has been underexplored more broadly so it is difficult to predict this labor supply effect. I exploit the randomized timing of the 2008 economic stimulus payments to study the effects of transitory income on monthly household labor earnings. Rebates can …

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