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Evaluating Local Policies in Centralized Markets

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  • Dmitry Arkhangelsky
  • Wisse Rutgers

Abstract

We study a policy evaluation problem in centralized markets. We show that the aggregate impact of any marginal reform, the Marginal Policy Effect (MPE), is nonparametrically identified using data from a baseline equilibrium, without additional variation in the policy rule. We achieve this by constructing the equilibrium-adjusted outcome: a policy-invariant structural object that augments an agent's outcome with the full equilibrium externality their participation imposes on others. We show that these externalities can be constructed using estimands that are already common in empirical work. The MPE is identified as the covariance between our structural outcome and the reform's direction, providing a flexible tool for optimal policy targeting and a novel bridge to the Marginal Treatment Effects literature.

Suggested Citation

  • Dmitry Arkhangelsky & Wisse Rutgers, 2025. "Evaluating Local Policies in Centralized Markets," Papers 2510.20032, arXiv.org.
    • Handle: RePEc:arx:papers:2510.20032
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    References listed on IDEAS

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    5. repec:hal:pseose:halshs-00840901 is not listed on IDEAS
    6. Yuchen Hu & Shuangning Li & Stefan Wager, 2022. "Average direct and indirect causal effects under interference [Estimating average causal effects under general interference, with application to a social network experiment]," Biometrika, Biometrika Trust, vol. 109(4), pages 1165-1172.
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    Cited by:

    1. Yechan Park & Xiaodong Yang, 2026. "Decomposition of Spillover Effects Under Misspecification: Pseudo-true Estimands and a Local-Global Extension," Papers 2602.12023, arXiv.org, revised Mar 2026.

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