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Identification and estimation of spillover effects in randomized experiments

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  • Vazquez-Bare, Gonzalo

Abstract

I study identification, estimation and inference for spillover effects in experiments where units’ outcomes may depend on the treatment assignments of other units within a group. I show that the commonly-used reduced-form linear-in-means regression identifies a weighted sum of spillover effects with some negative weights, and that the difference in means between treated and controls identifies a combination of direct and spillover effects entering with different signs. I propose nonparametric estimators for average direct and spillover effects that overcome these issues and are consistent and asymptotically normal under a precise relationship between the number of parameters of interest, the total sample size and the treatment assignment mechanism. These findings are illustrated using data from a conditional cash transfer program and with simulations. The empirical results reveal the potential pitfalls of failing to flexibly account for spillover effects in policy evaluation: the estimated difference in means and the reduced-form linear-in-means coefficients are all close to zero and statistically insignificant, whereas the nonparametric estimators I propose reveal large, nonlinear and significant spillover effects.

Suggested Citation

  • Vazquez-Bare, Gonzalo, 2023. "Identification and estimation of spillover effects in randomized experiments," Journal of Econometrics, Elsevier, vol. 237(1).
  • Handle: RePEc:eee:econom:v:237:y:2023:i:1:s0304407621003067
    DOI: 10.1016/j.jeconom.2021.10.014
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    Citations

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    Cited by:

    1. Dario Tortarolo & Guillermo Cruces & Gonzalo Vazquez-Bare, 2023. "Design of partial population experiments with an application to spillovers in tax compliance," IFS Working Papers W23/17, Institute for Fiscal Studies.
    2. Rodríguez-Puello, Gabriel & Rickardsson, Jonna, 2024. "Spatial Diffusion of Economic Shocks in the Labor Market: Evidence from a Mining Boom and Bust," OSF Preprints tzmf2, Center for Open Science.
    3. Hernández-Agramonte, Juan Manuel & Namen, Olga & Näslund-Hadley, Emma & Biehl, Maria Loreto, 2024. "Supporting early childhood development remotely: Experimental evidence from SMS messages," Journal of Development Economics, Elsevier, vol. 166(C).
    4. Guillermo Cruces & Dario Tortarolo & Gonzalo Vazquez-Bare, 2024. "Design of Partial Population Experiments with an Application to Spillovers in Tax Compliance," CEDLAS, Working Papers 0337, CEDLAS, Universidad Nacional de La Plata.
    5. Yuehao Bai & Azeem M. Shaikh & Max Tabord-Meehan, 2024. "A Primer on the Analysis of Randomized Experiments and a Survey of some Recent Advances," Papers 2405.03910, arXiv.org.

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    More about this item

    Keywords

    Spillover effects; Treatment effects; Causal inference; Interference;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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