Policy effect evaluation under counterfactual neighbourhood intervention in the presence of spillover
Year: 2025
Type: article
Abstract: Policy interventions can spill over to units of a population that is not directly exposed to the policy but are geographically close to the units receiving the intervention. In recent work, investigations of spillover effects on neighbouring regions have focused on estimating the average treatment effect of a particular policy in an observed setting. Our research question broadens this scope by asking what policy consequences would the treated units have experienced under counterfactual exposure settings. When we only observe treated unit(s) surrounded by controls—as is common when a policy intervention is implemented in a single city or state—this effect inquires about the policy effects under a counterfactual neighbourhood policy status that we do not, in actuality, observe. In this work, we extend difference-in-differences approaches to spillover settings and develop identification conditions required to evaluate policy effects in counterfactual treatment scenarios. These causal quantities are policy-relevant for designing effective policies for populations subject to various neighbourhood statuses. We develop several estimators that have desirable properties. We provide an illustrative data application to the Philadelphia beverage tax study.
Authors: Youjin Lee, Gary Hettinger, Nandita Mitra
Institutions: Brown University, University of Pennsylvania
Language: English
Subfield: Statistics and Probability
Field: Mathematics
Domain: Physical Sciences
Open Access status: bronze
Funder: National Science Foundation
OpenAlex ID: W4407591524