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The Importance of Base-Rates in Differential Impact: A Bail Reform Case-Study

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  • Aurélie Ouss
  • Megan T. Stevenson

Abstract

Researchers commonly seek to understand whether a policy has differential impact on different subgroups, yet the choice of differential impact metric can have a huge effect on interpretation. Commonly used metrics, such as comparing treatment effects in magnitude or as a percentage of the control mean, frequently do not correspond to the question of interest. If the relevant question is how the intervention affected potential beneficiaries of the reform, a different base rate must be used. We demonstrate how to implement a base-rate adjusted impact metric in a difference-in-differences setting using Philadelphia bail reform as an example.

Suggested Citation

  • Aurélie Ouss & Megan T. Stevenson, 2025. "The Importance of Base-Rates in Differential Impact: A Bail Reform Case-Study," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 181(1), pages 139-155.
  • Handle: RePEc:mhr:jinste:urn:doi:10.1628/jite-2025-0008
    DOI: 10.1628/jite-2025-0008
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    More about this item

    Keywords

    bail reform; differential impact; racial disparities;
    All these keywords.

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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