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Sep 12

Regression Discontinuity Design with Distribution-Valued Outcomes

This article introduces Regression Discontinuity Design (RDD) with Distribution-Valued Outcomes (R3D), extending the standard RDD framework to settings where the outcome is a distribution rather than a scalar. Such settings arise when treatment is assigned at a higher level of aggregation than the outcome-for example, when a subsidy is allocated based on a firm-level revenue cutoff while the outcome of interest is the distribution of employee wages within the firm. Since standard RDD methods cannot accommodate such two-level randomness, I propose a novel approach based on random distributions. The target estimand is a "local average quantile treatment effect", which averages across random quantiles. To estimate this target, I introduce two related approaches: one that extends local polynomial regression to random quantiles and another based on local Fr\'echet regression, a form of functional regression. For both estimators, I establish asymptotic normality and develop uniform, debiased confidence bands together with a data-driven bandwidth selection procedure. Simulations validate these theoretical properties and show existing methods to be biased and inconsistent in this setting. I then apply the proposed methods to study the effects of gubernatorial party control on within-state income distributions in the US, using a close-election design. The results suggest a classic equality-efficiency tradeoff under Democratic governorship, driven by reductions in income at the top of the distribution.

Free Discontinuity Regression: With an Application to the Economic Effects of Internet Shutdowns

Sharp, multidimensional changepoints-abrupt shifts in a regression surface whose locations and magnitudes are unknown-arise in settings as varied as gene-expression profiling, financial covariance breaks, climate-regime detection, and urban socioeconomic mapping. Despite their prevalence, there are no current approaches that jointly estimate the location and size of the discontinuity set in a one-shot approach with statistical guarantees. We therefore introduce Free Discontinuity Regression (FDR), a fully nonparametric estimator that simultaneously (i) smooths a regression surface, (ii) segments it into contiguous regions, and (iii) provably recovers the precise locations and sizes of its jumps. By extending a convex relaxation of the Mumford-Shah functional to random spatial sampling and correlated noise, FDR overcomes the fixed-grid and i.i.d. noise assumptions of classical image-segmentation approaches, thus enabling its application to real-world data of any dimension. This yields the first identification and uniform consistency results for multivariate jump surfaces: under mild SBV regularity, the estimated function, its discontinuity set, and all jump sizes converge to their true population counterparts. Hyperparameters are selected automatically from the data using Stein's Unbiased Risk Estimate, and large-scale simulations up to three dimensions validate the theoretical results and demonstrate good finite-sample performance. Applying FDR to an internet shutdown in India reveals a 25-35% reduction in economic activity around the estimated shutdown boundaries-much larger than previous estimates. By unifying smoothing, segmentation, and effect-size recovery in a general statistical setting, FDR turns free-discontinuity ideas into a practical tool with formal guarantees for modern multivariate data.

FGBench: A Dataset and Benchmark for Molecular Property Reasoning at Functional Group-Level in Large Language Models

Large language models (LLMs) have gained significant attention in chemistry. However, most existing datasets center on molecular-level property prediction and overlook the role of fine-grained functional group (FG) information. Incorporating FG-level data can provide valuable prior knowledge that links molecular structures with textual descriptions, which can be used to build more interpretable, structure-aware LLMs for reasoning on molecule-related tasks. Moreover, LLMs can learn from such fine-grained information to uncover hidden relationships between specific functional groups and molecular properties, thereby advancing molecular design and drug discovery. Here, we introduce FGBench, a dataset comprising 625K molecular property reasoning problems with functional group information. Functional groups are precisely annotated and localized within the molecule, which ensures the dataset's interoperability thereby facilitating further multimodal applications. FGBench includes both regression and classification tasks on 245 different functional groups across three categories for molecular property reasoning: (1) single functional group impacts, (2) multiple functional group interactions, and (3) direct molecular comparisons. In the benchmark of state-of-the-art LLMs on 7K curated data, the results indicate that current LLMs struggle with FG-level property reasoning, highlighting the need to enhance reasoning capabilities in LLMs for chemistry tasks. We anticipate that the methodology employed in FGBench to construct datasets with functional group-level information will serve as a foundational framework for generating new question-answer pairs, enabling LLMs to better understand fine-grained molecular structure-property relationships. The dataset and evaluation code are available at https://github.com/xuanliugit/FGBench.