Interference, Cross-border Shopping, and Substitution Effects

Oregon Convention Center 

Policy interventions can affect not only the directly targeted units but also neighboring units in close geographical proximity, as well as substitute units that are unaffected by the policy. For example, the Philadelphia beverage tax was found to be associated with an increased sales of taxed beverages in neighboring counties of Philadelphia, as well as an increased sales of untaxed alternative beverages and high-calorie foods in Philadelphia. We will consider two types of interference commonly observed in evaluating policy effects: interference due to (1) spatial proximity and (2) substitutability. Understanding and evaluating these spillover and substitution effects is crucial for assessing the comprehensive impact of policy interventions. In this talk, I will introduce novel causal estimands under counterfactual neighborhood interventions in the presence of spillover. These causal quantities are policy-relevant for designing effective policies for populations subject to various contextual scenarios. We will then establish identification conditions for estimating these effects and apply our proposed methods to investigate the effect of the Philadelphia beverage tax.