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Bounds on the fixed effects estimand in the presence of heterogeneous assignment propensities

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  • Humphreys, Macartan

Abstract

Fixed effects estimation, with linear controls for stratum membership, is often used to estimate treatment effects when assignment propensities differ across strata. In the presence of heterogeneity in treatment effects across strata, this estimator does not target the average treatment effect, however. Indeed, the implied estimand can range anywhere from the lowest to the highest stratum-level average effect. To facilitate the interpretation of results using this approach, I establish that if stratum-level average effects are monotonic in the shares assigned to treatment, then the fixed effects estimand lies between the average treatment effect for the treated and the average treatment effect for the controls.

Suggested Citation

  • Humphreys, Macartan, 2025. "Bounds on the fixed effects estimand in the presence of heterogeneous assignment propensities," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13(1), pages 1-7.
    • Handle: RePEc:zbw:espost:324005
    DOI: 10.1515/jci-2024-0040
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    References listed on IDEAS

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    2. Ho, Daniel E. & Imai, Kosuke & King, Gary & Stuart, Elizabeth A., 2007. "Matching as Nonparametric Preprocessing for Reducing Model Dependence in Parametric Causal Inference," Political Analysis, Cambridge University Press, vol. 15(3), pages 199-236, July.
    3. Joshua D. Angrist, 1998. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," Econometrica, Econometric Society, vol. 66(2), pages 249-288, March.
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