This note proposes the continuous treatment approach as a valuable alternative to propensity score matching for evaluating economic effects of merger and acquisitions (M&As). This framework allows considering the variation in treatment intensities explicitly, and it does not call for an arbitrary definition of cutoff values in traded ownership shares to construct a binary treatment indicator. We demonstrate the usefulness of this approach using data from European M&As and by relying on the example of post-M&A employment effects. The empirical exercise reveals some heterogeneities over the whole distribution of acquired ownership shares and across different types of M&As and country groups.

Bipartite experiments have recently emerged as a focal point in causal inference. In these experiments, treatment is administered to one set of units, while outcomes of interest are gauged on a distinct set of units. Such experiments are especially valuable in scenarios where pronounced interference effects transpire between units on a bipartite network. For instance, in market experiments, designating treatment at the seller level and assessing outcomes at the buyer level (or vice-versa) can lead to causal models that more accurately reflect the inherent interference between buyers and sellers. Although bipartite experiments can enhance the precision of causal effect estimations in specific contexts, it's imperative to conduct the analysis judiciously to avoid introducing undue bias through the network. Drawing from the generalized propensity score literature, we demonstrate that it's feasible to achieve unbiased estimates of causal effects for bipartite experiments, given a conventional set of assumptions. Furthermore, we delve into the formulation of confidence sets with accurate coverage probabilities. By employing a bipartite graph from a publicly accessible dataset previously explored in bipartite experiment studies, we illustrate, via simulations, a notable reduction in bias and augmented coverage. / Statistics

Employing the causal inference methods (matching for binary and continuous treatments), I examined the impact of conservation payments on corn yield. I used the propensity score and covariate distance matching and generalized propensity score methods to manage the problem of selection bias since the enrollment of conservation programs (i.e., receiving conservation payments) is not a randomized experiment. Using USDA Economic Research Service – Agricultural Resource Management Survey (ERS-ARMS) field-level data, I assessed whether receiving conservation payments had harm on corn yield in the Mississippi and Arkansas Delta. The findings from the two binary matchings showed that receiving conservation payments didn’t decrease corn yield. The generalized propensity approach revealed that lower conservation payments received held higher corn yield while higher conservation payments led to lower corn yield.

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<p dir="ltr">The National Flood Insurance Program (NFIP), which is run by the U.S. Federal Emergency Management Agency (FEMA), is presently under huge debt to the U.S. treasury. The debt is primarily caused by low flood insurance take-up rate, low willingness to pay for flood insurance, and large payouts after major disasters. Addressing this insolvency problem requires the NFIP to understand (1) what drives the demand for flood insurance so that it can be increased, (2) how risk factors contribute towards large flood insurance payouts so that effective risk reduction policies can be planned, and (3) how to predict the future flood insurance payouts so that the NFIP can be financially prepared. This research has answered these three fundamental questions by developing empirical models based on historical data. To answer the first question, this research has developed a propensity score-based causal model that analyzed one of the key components that influences the demand for flood insurance – the availability of post-disaster government assistance. It was found that the availability of the federal payout in a county in a year increased the number of flood insurance policies by 5.2% and the total insured value of the policies by 4.6% in the following year. Next, this research has developed Mixed Effects Regression model that quantified the causal relationships between the annual flood insurance payout in a county and flood related risk factors such as flood exposure, infrastructure vulnerability, social vulnerability, community resilience, and the number of mobile homes in the county. Based on the derived causal estimates, it was predicted that climate change, which is expected to increase flood exposure in coastal counties, will increase the annual NFIP payout in New Orleans, Louisiana by $2.04 billion in the next 30 years. Lastly, to make the NFIP financially prepared for future payouts, this research has developed a predictive model that can predict the annual NFIP payout in a county with adequate predictive accuracy. The predictive model was used to predict the NFIP payout for 2021 and it was able to predict that with a 9.8% prediction error. The outcomes of this research create new knowledge to inform policy decisions and strategies aimed at fortifying the NFIP. This includes strategies such as flood protection infrastructure, tailored disaster assistance, and other interventions that can bolster flood insurance uptake while mitigating the risk of substantial payouts. Ultimately, this research contributes to sustaining the NFIP's ability to provide vital flood insurance coverage to millions of Americans.</p>