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View Code? Open in Web Editor NEWAnalyze bunching in a kink or notch setting
License: Other
Analyze bunching in a kink or notch setting
License: Other
I've heard this several times. While upward kinks exist in real life (e.g. overtime pay), I don't know about much literature on them. In fact, Kleven (2016) writes that it is possible to calculate an elasticity with them, but researchers are not really trying to because the positive kink should create a hole in the distribution, but it is not observed in real life data. Nevertheless, let's think of how this would work:
looks like the year should be 2011 in this reference
I'm not sure why it was set up this way to begin with. It's possible to change. However, since the calculations are done by binning, a highly asymmetrical placement could give weird results. I wonder if users can be trusted with this. In any case, perhaps I could add the option for users to input their own bins.
This was specifically requested. This also could have real life implications which seem more plausible to exist in the data: think of a high bonus after working more than X hours. If people can alter X, nobody would want miss X by an hour. Here, people bunch from the lower side, not the higher, but the process should be very similar. In fact, it might be feasible to do with just flipping the signs on some of the variables.
The denominator should have the average counter-factual per bin. The added multiplication by binw seems incorrect. Same corrections a few lines later. In fact, this could just be the average counter-factual count in the excluded area.
Thanks Javier for pointing this out
This came as a feedback several times. Right now only 1 kink or notch are allowed (for notches, a change in MRT is also allowed in the notch). This could have several implications:
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