Abstract:Typical censoring models have mass points at the upper or lower tails, or at both tails, of an otherwise continuous outcome distribution. In contrast, we consider a censoring model with a mass point in the interior of the outcome distribution. We refer to this mass point as “bunching” and use it to estimate model parameters. For example, economic theory suggests that, for increasing marginal income tax rates, many taxpayers will report income exactly at the threshold where the tax rate increases. This translat… Show more
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