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Treatment interactions with nonexperimental data in Stata

Author

Listed:
  • Graham K. Brown

    () (University of Bath)

  • Thanos Mergoupis

    () (University of Bath)

Abstract

Treatment effects may vary with the observed characteristics of the treated, often with important implications. In the context of experimental data, a growing literature deals with the problem of specifying treatment interaction terms that most effectively capture this variation. Some results of this literature are now implemented in Stata. With nonexperimental (observational) data, and in particular when selection into treatment depends on unmeasured factors, treatment effects can be estimated using Stata’s treatreg command. Though not originally designed for this purpose, treatreg can be used to consistently estimate treatment interaction parameters. With interactions, however, adjustments are required to generate predicted values and estimate the average treatment effect. In this article, we introduce commands that perform this adjustment for multiplicative interactions, and we show the required adjustment for more complicated interactions. Copyright 2011 by StataCorp LP.

Suggested Citation

  • Graham K. Brown & Thanos Mergoupis, 2011. "Treatment interactions with nonexperimental data in Stata," Stata Journal, StataCorp LP, vol. 11(4), pages 545-555, December.
  • Handle: RePEc:tsj:stataj:v:11:y:2011:i:4:p:545-555
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    References listed on IDEAS

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    1. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    2. Sauerbrei, Willi & Royston, Patrick & Zapien, Karina, 2007. "Detecting an interaction between treatment and a continuous covariate: A comparison of two approaches," Computational Statistics & Data Analysis, Elsevier, vol. 51(8), pages 4054-4063, May.
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    3. Matthew Olczak, 2015. "Chain-Store Pricing and the Structure of Retail Markets," Journal of Industry, Competition and Trade, Springer, vol. 15(2), pages 87-104, June.
    4. Marie-Catherine Riekhof, 2016. "The Insurance Premium in the Interest Rates of Interlinked Loans in a Small-scale Fishery," CER-ETH Economics working paper series 16/264, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    5. Macias, Antonio J. & Moeller, Thomas, 2016. "Target signaling with material adverse change clauses in merger agreements," Journal of Empirical Finance, Elsevier, vol. 39(PA), pages 69-92.
    6. Anahí Briozzo & Clara Cardone-Riportella, 2012. "Evaluating the Impact of Public Programs of Financial Aid to SMEs during times of crisis: The Spanish Experience," Working Papers 12.04, Universidad Pablo de Olavide, Department of Financial Economics and Accounting (former Department of Business Administration).
    7. Debela, Bethelhem Legesse & Holden , Stein, 2014. "How Does Ethiopia’s Productive Safety Net Program Affect Livestock Accumulation and Children’s Education?," CLTS Working Papers 8/14, Norwegian University of Life Sciences, Centre for Land Tenure Studies.

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