Amy Finkelstein: Welfare Analysis Meets Causal Inference: A Suggested Interpretation of Hendren: "In a pair of interconnected, important and impenetrable papers, Nathan Hendren has provided a framework for translating estimates of the causal effects of policies into welfare analyses of these policies. In this brief note, I describe the framework-which Hendren has named 'The Marginal Value of Public Funds' (MVPF)-and how it can be used for empirical public finance welfare analysis. I also discuss how the MVPF relates to 'traditional' public finance welfare analysis tools such as the marginal excess burden (MEB) and marginal cost of public funds (MCPF). Finally, I describe several recent empirical applications as a way of further illustrating and clarifying the approach...


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