IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/23602.html
   My bibliography  Save this paper

Regression Discontinuity in Time: Considerations for Empirical Applications

Author

Listed:
  • Catherine Hausman
  • David S. Rapson

Abstract

Recent empirical work in several economic fields, particularly environmental and energy economics, has adapted the regression discontinuity (RD) framework to applications where time is the running variable and treatment begins at a particular threshold in time. In this guide for practitioners, we discuss several features of this “Regression Discontinuity in Time” (RDiT) framework that differ from the more standard cross-sectional RD framework. First, many applications (particularly in environmental economics) lack cross-sectional variation and are estimated using observations far from the temporal threshold. This common empirical practice is hard to square with the assumptions of a cross-sectional RD, which is conceptualized for an estimation bandwidth shrinking even as the sample size increases. Second, estimates may be biased if the time-series properties of the data are ignored (for instance in the presence of an autoregressive process), or more generally if short-run and long-run effects differ. Finally, tests for sorting or bunching near the threshold are often irrelevant, making the framework closer to an event study than a regression discontinuity design. Based on these features and motivated by hypothetical examples using air quality data, we offer suggestions for the empirical researcher wishing to use the RD in time framework.

Suggested Citation

  • Catherine Hausman & David S. Rapson, 2017. "Regression Discontinuity in Time: Considerations for Empirical Applications," NBER Working Papers 23602, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23602
    Note: EEE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w23602.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lucas W. Davis, 2008. "The Effect of Driving Restrictions on Air Quality in Mexico City," Journal of Political Economy, University of Chicago Press, vol. 116(1), pages 38-81, February.
    2. Gallego, Francisco & Montero, Juan-Pablo & Salas, Christian, 2013. "The effect of transport policies on car use: A bundling model with applications," Energy Economics, Elsevier, vol. 40(S1), pages 85-97.
    3. Anthony C. Fisher & W. Michael Hanemann & Michael J. Roberts & Wolfram Schlenker, 2012. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Comment," American Economic Review, American Economic Association, vol. 102(7), pages 3749-3760, December.
    4. Antonio Bento & Daniel Kaffine & Kevin Roth & Matthew Zaragoza-Watkins, 2014. "The Effects of Regulation in the Presence of Multiple Unpriced Externalities: Evidence from the Transportation Sector," American Economic Journal: Economic Policy, American Economic Association, vol. 6(3), pages 1-29, August.
    5. Dasgupta, Susmita & Laplante, Benoit & Mamingi, Nlandu, 2001. "Pollution and Capital Markets in Developing Countries," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 310-335, November.
    6. Koichiro Ito, 2015. "Asymmetric Incentives in Subsidies: Evidence from a Large-Scale Electricity Rebate Program," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 209-237, August.
    7. Gallego, Francisco & Montero, Juan-Pablo & Salas, Christian, 2013. "The effect of transport policies on car use: Evidence from Latin American cities," Journal of Public Economics, Elsevier, vol. 107(C), pages 47-62.
    8. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    9. Konar, Shameek & Cohen, Mark A., 1997. "Information As Regulation: The Effect of Community Right to Know Laws on Toxic Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 109-124, January.
    10. Nicholas E. Burger & Daniel T. Kaffine & Bo Yu, 2013. "Did California's hand-held cell phone ban reduce accidents?," Working Papers 2013-08, Colorado School of Mines, Division of Economics and Business.
    11. 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 201-209, January.
    12. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    13. Alan I. Barreca & Melanie Guldi & Jason M. Lindo & Glen R. Waddell, 2011. "Saving Babies? Revisiting the effect of very low birth weight classification," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 2117-2123.
    14. Michael L. Anderson, 2014. "Subways, Strikes, and Slowdowns: The Impacts of Public Transit on Traffic Congestion," American Economic Review, American Economic Association, vol. 104(9), pages 2763-2796, September.
    15. Maximilian Auffhammer & Ryan Kellogg, 2011. "Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality," American Economic Review, American Economic Association, vol. 101(6), pages 2687-2722, October.
    16. Hamilton James T., 1995. "Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 98-113, January.
    17. Grainger, Corbett A. & Costello, Christopher J., 2014. "Capitalizing property rights insecurity in natural resource assets," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 224-240.
    18. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
    19. Lang, Corey & Siler, Matthew, 2013. "Engineering estimates versus impact evaluation of energy efficiency projects: Regression discontinuity evidence from a case study," Energy Policy, Elsevier, vol. 61(C), pages 360-370.
    20. Yihsu Chen & Alexander Whalley, 2012. "Green Infrastructure: The Effects of Urban Rail Transit on Air Quality," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 58-97, February.
    21. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    22. Maria De Paola & Vincenzo Scoppa & Mariatiziana Falcone, 2013. "The deterrent effects of the penalty points system for driving offences: a regression discontinuity approach," Empirical Economics, Springer, vol. 45(2), pages 965-985, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wright, Nicholas A. & Dorilas, Ernest, 2022. "Do Cellphone Bans Save Lives? Evidence From Handheld Laws on Traffic Fatalities," Journal of Health Economics, Elsevier, vol. 85(C).
    2. Alexander Luttmann & Cody Nehiba, 2020. "The Effects of Employee Hours‐of‐Service Regulations on the U.S. Airline Industry," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(4), pages 1043-1075, September.
    3. Dang, Hai-Anh H. & Trinh, Trong-Anh, 2021. "Does the COVID-19 lockdown improve global air quality? New cross-national evidence on its unintended consequences," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    4. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    5. Gillingham, Kenneth & Huang, Pei, 2021. "Racial disparities in the health effects from air pollution: Evidence from ports," ZEW Discussion Papers 21-058, ZEW - Leibniz Centre for European Economic Research.
    6. Felipe Bedoya-Maya & Agustina Calatayud, 2023. "Enhanced port-city interface through infrastructure investment: evidence from Buenos Aires," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 25(2), pages 249-271, June.
    7. Gugler, Klaus & Haxhimusa, Adhurim & Liebensteiner, Mario, 2023. "Carbon pricing and emissions: Causal effects of Britain's carbon tax," Energy Economics, Elsevier, vol. 121(C).
    8. Kheiravar, Khaled H, 2019. "Economic and Econometric Analyses of the World Petroleum Industry, Energy Subsidies, and Air Pollution," Institute of Transportation Studies, Working Paper Series qt3gj151w9, Institute of Transportation Studies, UC Davis.
    9. Zhu, Junming & Wang, Jiali, 2021. "The effects of fuel content regulation at ports on regional pollution and shipping industry," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    10. Xinyu Hou & Puyang Sun, 2023. "The impact of dismantling state monopoly on market integration: Evidence from the edible salt reform in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(3), pages 589-609, July.
    11. Burgherr, David, 2022. "Behavioral Responses to a Pension Savings Mandate : Quasi-experimental Evidence from Swiss Tax Data," CAGE Online Working Paper Series 645, Competitive Advantage in the Global Economy (CAGE).
    12. Li, Han & Li, Jiangyi & Lu, Yi & Xie, Huihua, 2020. "Housing wealth and labor supply: Evidence from a regression discontinuity design," Journal of Public Economics, Elsevier, vol. 183(C).
    13. Lovett, Nicholas & Xue, Yuhan, 2022. "Rare homicides, criminal behavior, and the returns to police labor," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 172-195.
    14. Nian, Yongwei, 2023. "Incentives, penalties, and rural air pollution: Evidence from satellite data," Journal of Development Economics, Elsevier, vol. 161(C).
    15. Zhang, Wei & Lin Lawell, C.-Y. Cynthia & Umanskaya, Victoria I., 2017. "The effects of license plate-based driving restrictions on air quality: Theory and empirical evidence," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 181-220.
    16. Jianqing Ruan & Qingwen Cai & Songqing Jin, 2021. "Impact of COVID‐19 and Nationwide Lockdowns on Vegetable Prices: Evidence from Wholesale Markets in China," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1574-1594, October.
    17. Kejia Hu & Sunil Chopra & Yuche Chen, 2021. "The Effect of Tightening Standards on Automakers’ Non‐compliance," Production and Operations Management, Production and Operations Management Society, vol. 30(9), pages 3094-3115, September.
    18. Ivan A Canay & Vishal Kamat, 2018. "Approximate Permutation Tests and Induced Order Statistics in the Regression Discontinuity Design," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1577-1608.
    19. Adam C. Sales & Ben B. Hansen, 2020. "Limitless Regression Discontinuity," Journal of Educational and Behavioral Statistics, , vol. 45(2), pages 143-174, April.
    20. Volker Schöer & Debra Shepherd, 2013. "Compulsory tutorial programmes and performance in undergraduate microeconomics: A regression discontinuity design," Working Papers 27/2013, Stellenbosch University, Department of Economics.

    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:23602. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.