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New Evidence on Linear Regression and Treatment Effect Heterogeneity

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  • Słoczyński, Tymon

Abstract

In this paper I provide new evidence on the implications of treatment effect heterogeneity for least squares estimation when the effects are inappropriately assumed to be homogenous. I prove that under a set of benchmark assumptions linear regression provides a consistent estimator of the population average treatment effect on the treated times the population proportion of the nontreated individuals plus the population average treatment effect on the nontreated times the population proportion of the treated individuals. Consequently, in many empirical applications the linear regression estimates might not be close to any of the standard average treatment effects of interest.

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  • Słoczyński, Tymon, 2012. "New Evidence on Linear Regression and Treatment Effect Heterogeneity," MPRA Paper 39524, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39524
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    Cited by:

    1. Sloczynski, Tymon, 2013. "Population Average Gender Effects," IZA Discussion Papers 7315, Institute of Labor Economics (IZA).
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    4. Marenya, Paswel & Kassie, Menale & Jaleta, Moti & Rahut, Dil Bahadur, 2015. "Does gender of the household head explain smallholder farmers' maize market positions? Evidence from Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 212229, International Association of Agricultural Economists.

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    More about this item

    Keywords

    treatment effects; linear regression; ordinary least squares; decomposition methods;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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