The central problem is that compensation eligibility is typically defined by a geographic boundary, yet the social and economic networks of informal scrap dealers do not respect that boundary. Because no observational data are available, the paper characterises the operating characteristics of a before-after-control-impact design under a declared variance structure. The design uses between-cluster standard deviation of 6.0, residual standard deviation of 4.5, and intraclass correlation of 0.64. Power was estimated across 2000 design cells for cluster counts of 8, 16, 24 and 32 and effect sizes of 3, 5 and 8 percentage points. The results indicate that 54 clusters are required to detect a 5 percentage point effect at 80 per cent power. Boundary-discontinuity estimation of compensation zones is feasible only when the cluster count is large enough to absorb the intraclass correlation, and that the fragmentation of scrap-dealer networks across the boundary is the mechanism that makes the compensation zone a poor proxy for the affected population. The contribution is a design-based clarification of how compensation zones should be evaluated when the treated population is networked rather than spatially contained.
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Antwi et al. (2026) studied this question.
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