American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Welfare Analysis of Changing Notches: Evidence from Bolsa Família
American Economic Journal: Economic Policy
vol. 17,
no. 2, May 2025
(pp. 122–61)
Abstract
We develop a framework to bound the welfare impacts of arbitrarily large reforms to notches using two sufficient statistics: the change in the number of households located below the new notch and the change in the number of households located below the old notch. Our bounds hold in a wide class of models, highlighting a new way to use reduced-form bunching evidence for welfare analysis without making strong assumptions on the economic environment. We estimate these two statistics using a difference-in-difference strategy for a reform to the antipoverty program Bolsa Família, finding that the reform's MVPF is between 0.90–1.12.Citation
Bergstrom, Katy, William Dodds, and Juan Rios. 2025. "Welfare Analysis of Changing Notches: Evidence from Bolsa Família." American Economic Journal: Economic Policy 17 (2): 122–61. DOI: 10.1257/pol.20230024Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- H83 Public Administration; Public Sector Accounting and Audits
- I32 Measurement and Analysis of Poverty
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- O12 Microeconomic Analyses of Economic Development