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Another look at the regression discontinuity design

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  • Erich Battistin

    ()
    (Institute for Fiscal Studies)

  • Enrico Rettore

Abstract

The attractiveness of the Regression Discontinuity Design (RDD) in its sharp formulation rests on close similarities with a formal experimental design. On the other hand, it is of limited applicability since rarely individuals are assigned to the treatment group on the basis of a pre-program measure observable to the analyst. Besides, it only allows to identify the mean impact of the program for a very specific sub-population of individuals. In this paper we show that the sharp RDD straightforwardly generalizes to the instances in which the eligibility for the program is established with respect to an observable pre-program measure with eligible individuals self-selecting into the treatment group according to an unknown process. This set-up also turns out very convenient to define a specification test on conventional non-experimental estimators of the program effect needed to identify the mean impact away from the threshold for eligibility. Data requirements are made explicit.

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Paper provided by Centre for Microdata Methods and Practice, Institute for Fiscal Studies in its series CeMMAP working papers with number CWP01/03.

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Length: 18 pp.
Date of creation: Mar 2003
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Handle: RePEc:ifs:cemmap:01/03

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References

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  1. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
  2. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  3. Daniel Friedlander & David H. Greenberg & Philip K. Robins, 1997. "Evaluating Government Training Programs for the Economically Disadvantaged," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1809-1855, December.
  4. Angrist, J.D. & Imbens, G.W., 1991. "Sources of Identifying Information in Evaluation Models," Papers 9142, Tilburg - Center for Economic Research.
  5. Erich Battistin & Enrico Rettore, 2002. "Testing for programme effects in a regression discontinuity design with imperfect compliance," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(1), pages 39-57.
  6. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
  7. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
  8. James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc.
  9. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2001. "Evaluating the employment impact of a mandatory job search assistance program," IFS Working Papers W01/20, Institute for Fiscal Studies.
  10. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
  11. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
  12. Heckman, J. & Smith, J. & Taber, C., 1994. "Accounting for Dropouts in Evaluations of Social Experiments," University of Chicago - Economics Research Center 94-3, Chicago - Economics Research Center.
  13. David S. Lee, 2001. "The Electoral Advantage to Incumbency and Voters' Valuation of Politicians' Experience: A Regression Discontinuity Analysis of Elections to the U.S..," NBER Working Papers 8441, National Bureau of Economic Research, Inc.
  14. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
  15. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring.
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Cited by:
  1. Sergio de Nardis & Massimo Mancini & Carmine Pappalardo, 2003. "Regolazione del mercato del lavoro e crescita dimensionale delle imprese: Una verifica sull'effetto soglia dei 15 dipendenti," ISAE Working Papers 38, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  2. Burgert, Derik, 2005. "The Impact of German Job Protection Legislation on Job Creation in Small Establishments - An Application of the Regression Discontinuity Design," MPRA Paper 5971, University Library of Munich, Germany.
  3. Derik Burgert, 2005. "Schwellenwerte im deutschen Kündigungsschutzrecht - Ein Beschäftigungshindernis für kleine Unternehmen?," FFB-Discussionpaper 51, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
  4. Ghazala Azmat, 2006. "The Incidence of an Earned Income Tax Credit: Evaluating the Impact on Wages in the UK," CEP Discussion Papers dp0724, Centre for Economic Performance, LSE.
  5. Battistin, Erich & Rettore, Enrico, 2008. "Ineligibles and eligible non-participants as a double comparison group in regression-discontinuity designs," Journal of Econometrics, Elsevier, vol. 142(2), pages 715-730, February.
  6. Carneiro, Pedro & Ginja, Rita, 2012. "Long Term Impacts of Compensatory Preschool on Health and Behavior: Evidence from Head Start," Working Paper Series, Center for Labor Studies 2012:6, Uppsala University, Department of Economics.
  7. Santarossa, Gino, 2008. "Note d'introduction sur l'évaluation d'impact d'un programme public par la méthode de régression par discontinuité
    [The Evaluation of Public Program Effect Using Regression Discontinuity Method
    ," MPRA Paper 11268, University Library of Munich, Germany.
  8. Luc Behaghel & Bruno Crépon & Béatrice Sédillot, 2005. "The Delalande Contribution and Transitions on The Labour Market," Economie et Statistique, Institut National de la Statistique et des Etudes Economiques, vol. 372, pages 61-88, February.
  9. Burgert, Derik, 2006. "Einstellungschancen von Älteren – Wie wirkt der Schwellenwert im Kündigungsschutz?," MPRA Paper 5846, University Library of Munich, Germany.
  10. Jens Hainmueller & Holger Lutz Kern, 2005. "Incumbency Effects in German and British Elections: A Quasi- Experimental Approach," Public Economics 0505009, EconWPA.
  11. Burgert, Derik, 2005. "Schwellenwerte im deutschen Kündigungsschutzrecht Ein Beschäftigungshindernis für kleine Unternehmen?," MPRA Paper 5969, University Library of Munich, Germany.

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