IESET.
Hypotheses·distribution·tax_inequality_mexico_2014_reform_distributional

The Pena Nieto 2014 Mexican tax reform (top marginal income tax rate raised from 30 to 35 percent, capital-gains taxation introduced at 10 percent, dividend tax 10 percent) produced a measurable but small reduction in the Mexican top-1 pretax income share over 2014-2018 vs LATAM synthetic control, with the effect attenuated by Mexico's high informal-sector share which limits the formal-tax-base distributional margin.

The discriminating test is the synth-control gap on top-1 share against the LATAM comparator pool.

PARTIALengine/runs/tax_inequality_mexico_2014_reform_distributional

PARTIAL — mean_gap=+14.74, |gap|/pre_sd=1.8, p_perm=1 (gap below 0.5×pre_sd or placebo p≥0.10)

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. mean_gap=+14.74, |gap|/pre_sd=1.8, p_perm=1 (gap below 0.5×pre_sd or placebo p≥0.10)

why it matters

Distributional claims often sound morally clear but are empirically complex. This test asks whether the proposed channel explains real differences across places.

how the test works

It compares 7 country or place units from 2005 to 2020, using a synthetic control design, with fixed effects for country and year.

what was measured
What changed
  • Mex 2014 tax reform post
  • Top marginal income tax rate
What we checked
  • Top 1pct pretax income share
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/tax_inequality_mexico_2014_reform_distributional
1007550250200520132020MEXBRAARGCOLPERCHLURY
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show top_1pct_pretax_income_share across 7 sampled countries over 2005–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for tax_inequality_mexico_2014_reform_distributional. Published chart will be generated from engine/runs/tax_inequality_mexico_2014_reform_distributional/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T12:29:43Z

The Pena Nieto 2014 Mexican tax reform (top marginal income tax rate raised from 30 to 35 percent, capital-gains taxation introduced at 10 percent, dividend tax 10 percent) produced a measurable but small reduction in the Mexican top-1 pretax income share over 2014-2018 vs LATAM synthetic control, with the effect attenuated by Mexico's high informal-sector share which limits the formal-tax-base distributional margin. The discriminating test is the synth-control gap on top-1 share against the LATAM comparator pool.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if Mexican top-1 pretax share falls by at least 0.4 percentage points 2014-2018 vs LATAM synth at p<0.10. REFUTED if no detectable gap or positive gap at four-year horizon.

formal test & threshold
test:      Synthetic-control with LATAM donor pool, treated MEX 2014.

Method

Template
synthetic_control
Fixed effects
country, year
Clustering
country
Sample
7 countries · 2005 – 2020
Evidence type
associational

Synthetic-control with LATAM donor pool. Treated MEX 2014.

Data

VariableSourceTransform
top_1pct_pretax_income_share
outcome
owid:top-1-share-of-total-incometier 2
level
mex_2014_tax_reform_post
treatment
constructed:indicator = 1 for MEX, year >= 2014tier 5
indicator
top_marginal_income_tax_rate
treatment
owid:top-marginal-income-tax-ratetier 2
level
log_real_gdp_per_capita
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
oil_price_real
control
imf_pcps:POILBREtier 1
real_yoy_pct_change

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — tax_inequality_mexico_2014_reform_distributional

Verdict: PARTIAL — mean_gap=+14.74, |gap|/pre_sd=1.8, p_perm=1 (gap below 0.5×pre_sd or placebo p≥0.10)

Pre-registration

  • Claim: The Pena Nieto 2014 Mexican tax reform (top marginal income tax rate raised from 30 to 35 percent, capital-gains taxation introduced at 10 percent, dividend tax 10 percent) produced a measurable but small reduction in the Mexican top-1 pretax income share over 2014-2018 vs LATAM synthetic control, with the effect attenuated by Mexico's high informal-sector share which limits the formal-tax-base distributional margin. The discriminating test is the synth-control gap on top-1 share against the LATAM comparator pool.
  • Falsification rule: SUPPORTED if Mexican top-1 pretax share falls by at least 0.4 percentage points 2014-2018 vs LATAM synth at p<0.10. REFUTED if no detectable gap or positive gap at four-year horizon.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: MEX
  • event_year: 2014
  • n_donors: 2
  • donor_weights (top): {'ARG': 0.7137, 'PER': 0.2863}
  • pre_rmse: 12.110385454339209
  • pre_period_sd: 8.004361311185297
  • mean_post_gap: 14.743496887417285
  • end_period_gap: 8.077959701766648
  • post_period_years: [2014, 2020]
  • placebo_p_value: 1.0
  • n_placebos: 2
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • owid:top-1-share-of-total-income → top_1pct_pretax_income_share (outcome, n=3294)
  • owid:top-marginal-income-tax-rate → top_marginal_income_tax_rate (treatment, n=590)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_real_gdp_per_capita (controls, n=14066)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, n=10714)

Generated by scripts/run_synth_did.py at 2026-04-30T12:29:43+00:00

Notes

Tax-inequality candidate, swarm-S6 batch 5.

Authored framework. Read the transparency note.