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Testing Identification Conditions of LATE in Fuzzy Regression Discontinuity Designs

Author

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  • Yu-Chin Hsu
  • Ji-Liang Shiu
  • Yuanyuan Wan

Abstract

This paper derives testable implications of the identifying conditions for the local average treatment effect (LATE) in fuzzy regression discontinuity (FRD) designs. Building upon the seminal work of Horowitz and Manski (1995), we show that the testable implications of these identifying conditions are a finite number of inequality restrictions on the observed data distribution. We then propose a specification test for the testable implications and show that the proposed test controls the size and is asymptotically consistent. We apply our test to the FRD designs used in Miller, Pinto, and Vera-Hernandez (2013) for Columbia’s insurance subsidy program, in Angrist and Lavy (1999) for Israel’s class size effect, in Pop-Eleches and Urquiola (2013) for Romanian school effect, and in Battistin, Brugiavini, Rettore, and Weber (2009) for the retirement effect on consumption.

Suggested Citation

  • Yu-Chin Hsu & Ji-Liang Shiu & Yuanyuan Wan, 2023. "Testing Identification Conditions of LATE in Fuzzy Regression Discontinuity Designs," Working Papers tecipa-761, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-761
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    References listed on IDEAS

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    1. Martin Huber & Giovanni Mellace, 2015. "Testing Instrument Validity for LATE Identification Based on Inequality Moment Constraints," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 398-411, May.
    2. Yingying Dong, 2018. "Alternative Assumptions to Identify LATE in Fuzzy Regression Discontinuity Designs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 80(5), pages 1020-1027, October.
    3. Toru Kitagawa, 2015. "A Test for Instrument Validity," Econometrica, Econometric Society, vol. 83(5), pages 2043-2063, September.
    4. Donald, Stephen G. & Hsu, Yu-Chin, 2011. "A new test for linear inequality constraints when the variance–covariance matrix depends on the unknown parameters," Economics Letters, Elsevier, vol. 113(3), pages 241-243.
    5. 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.
    6. Lukas Laffers & Giovanni Mellace, 2017. "A note on testing instrument validity for the identification of LATE," Empirical Economics, Springer, vol. 53(3), pages 1281-1286, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Fuzzy regression discontinuity design; Moment inequalities; Local continuity in means; Weighted bootstrap;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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