A note on variance estimation for the Oaxaca estimator of average treatment effects
AbstractWe derive the limiting distribution of the Oaxaca estimator of average treatment effects studied by Kline (2011). A consistent estimator of the asymptotic variance is proposed that makes use of standard regression routines. It is shown that ignoring uncertainty in group means will tend to lead to an overstatement of the asymptotic standard errors. Monte Carlo experiments examine the finite sample performance of competing approaches to inference.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 122 (2014)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/ecolet
Treatment effects; Oaxaca decomposition; Robust variance estimation;
Other versions of this item:
- Patrick M. Kline, 2014. "A Note on Variance Estimation for the Oaxaca Estimator of Average Treatment Effects," NBER Working Papers 19784, National Bureau of Economic Research, Inc.
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J7 - Labor and Demographic Economics - - Labor Discrimination
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