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Targeting with machine learning: an application to a tax rebate program in Italy

Andini, Monica, Ciani, Emanuele, de Blasio, Guido, D'Ignazio, Alessio and Salvestrini, Viola (2018) Targeting with machine learning: an application to a tax rebate program in Italy. Journal of Economic Behavior & Organization, 156. pp. 86-102. ISSN 0167-2681

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Identification Number: 10.1016/j.jebo.2018.09.010

Abstract

This paper shows how machine learning (ML) methods can be used to improve the effectiveness of public schemes and inform policy decisions. Focusing on a massive tax rebate scheme introduced in Italy in 2014, it shows that the effectiveness of the program would have significantly increased if the beneficiaries had been selected according to a transparent and easily interpretable ML algorithm. Then, some issues in estimating and using ML for the actual implementation of public policies, such as transparency and accountability, are critically discussed.

Item Type: Article
Additional Information: © 2018 Elsevier B.V.
Divisions: Economics
Subjects: H Social Sciences > HJ Public Finance
Q Science > QA Mathematics > QA76 Computer software
JEL classification: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General
Date Deposited: 29 Mar 2019 14:36
Last Modified: 14 Nov 2024 21:12
URI: http://eprints.lse.ac.uk/id/eprint/100381

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