NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Inferring Welfare Maximizing Treatment Assignment under Budget Constraints

Debopam Bhattacharya, Pascaline Dupas

NBER Working Paper No. 14447
Issued in October 2008, Revised in December 2011
NBER Program(s):Children, Health Economics, Technical Working Papers

This paper concerns the problem of allocating a binary treatment among a target population based on observed covariates. The goal is to (i) maximize the mean social welfare arising from an eventual outcome distribution, when a budget constraint limits what fraction of the population can be treated and (ii) to infer the dual value, i.e. the minimum resources needed to attain a specific level of mean welfare via efficient treatment assignment. We consider a treatment allocation procedure based on sample data from randomized treatment assignment and derive asymptotic frequentist confidence interval for the welfare generated from it. We propose choosing the conditioning covariates through cross-validation. The methodology is applied to the efficient provision of anti-malaria bed net subsidies, using data from a randomized experiment conducted in Western Kenya. We find that subsidy allocation based on wealth, presence of children and possession of bank account can lead to a rise in subsidy use by about 9 percentage points compared to allocation based on wealth only, and by 17 percentage points compared to a purely random allocation.

download in pdf format
   (524 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14447

Published: Bhattacharya, Debopam & Dupas, Pascaline, 2012. "Inferring welfare maximizing treatment assignment under budget constraints," Journal of Econometrics, Elsevier, vol. 167(1), pages 168-196. citation courtesy of

Users who downloaded this paper also downloaded* these:
Grossman and Helpman w12332 Separation of Powers and the Budget Process
Teklehaimanot, McCord, and Sachs w13664 Scaling Up Malaria Control in Africa: An Economic and Epidemiological Assessment
Holland Projecting the Reserves of the Pension Plans of State and Local Governments
Branstetter and Pizer w18214 Facing the Climate Change Challenge in a Global Economy
Frankel w17239 Over-optimism in Forecasts by Official Budget Agencies and Its Implications
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us