Structural Representations and Identification of Marginal Policy Effects

Zhixin Wang; Yu Zhang; Zhengyu Zhang

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arXiv · 2506.11694

Structural Representations and Identification of Marginal Policy Effects

Zhixin Wang·Yu Zhang·Zhengyu Zhang

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Abstract

This paper investigates the structural interpretation of the marginal policy effect (MPE) within nonseparable models. We demonstrate that, for a smooth functional of the outcome distribution, the MPE equals its functional derivative evaluated at the outcome-conditioned weighted average structural derivative. This equivalence is definitional rather than identification-based. Building on this theoretical result, we propose an alternative identification strategy for the MPE that complements existing methods.

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Zhixin Wang, Yu Zhang, Zhengyu Zhang. 2025-06-13. Structural Representations and Identification of Marginal Policy Effects. https://arxiv.org/abs/2506.11694

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