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Taking an Extra Moment to Consider Treatment Effects on Distributions

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This paper introduces Parameter Estimation by Raw Moments (PERM), a flexible method for evaluating a policy’s impact on the parameters of an outcome distribution. Such parameters include the variance, skewness and covariance of two outcomes. PERM simplifies distributional analysis by first separately estimating higher-order moment treatment effects, then combining these to derive distribution parameter treatment effects. Two implementations are discussed: regression with controls and DiD with staggered roll-out. Applying PERM DiD to a Swedish school reform finds it reduced education inequality but increased earnings variance resulting in a lower covariance between education and earnings.

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  • Heckley, Gawain & Petrie, Dennis, 2025. "Taking an Extra Moment to Consider Treatment Effects on Distributions," Working Papers 2025:4, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2025_004
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    1. Holmlund, Helena, 2007. "A Researcher's Guide to the Swedish Compulsory School Reform," Working Paper Series 9/2007, Stockholm University, Swedish Institute for Social Research.
    2. Martin Fischer & Ulf-G Gerdtham & Gawain Heckley & Martin Karlsson & Gustav Kjellsson & Therese Nilsson, 2021. "Education and health: long-run effects of peers, tracking and years," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(105), pages 3-49.
    3. Randi Hjalmarsson & Helena Holmlund & Matthew J. Lindquist, 2015. "The Effect of Education on Criminal Convictions and Incarceration: Causal Evidence from Micro‐data," Economic Journal, Royal Economic Society, vol. 125(587), pages 1290-1326, September.
    4. Barry I. Graubard & Edward L. Korn, 1999. "Predictive Margins with Survey Data," Biometrics, The International Biometric Society, vol. 55(2), pages 652-659, June.
    5. Sergio Firpo & Cristine Pinto, 2016. "Identification and Estimation of Distributional Impacts of Interventions Using Changes in Inequality Measures," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(3), pages 457-486, April.
    6. Heckley, Gawain & Gerdtham, Ulf-G. & Kjellsson, Gustav, 2016. "A general method for decomposing the causes of socioeconomic inequality in health," Journal of Health Economics, Elsevier, vol. 48(C), pages 89-106.
    7. Manudeep Bhuller & Magne Mogstad & Kjell G. Salvanes, 2017. "Life-Cycle Earnings, Education Premiums, and Internal Rates of Return," Journal of Labor Economics, University of Chicago Press, vol. 35(4), pages 993-1030.
    8. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    9. Martin Fischer & Gawain Heckley & Martin Karlsson & Therese Nilsson, 2022. "Revisiting Sweden's comprehensive school reform: Effects on education and earnings," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(4), pages 811-819, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Causal Inference; Policy Evaluation; Distribution Impacts; Income Inequality; Education Inequality;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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