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Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions

Author

Listed:
  • Andrew C. Eggers
  • Ronny Freier
  • Veronica Grembi
  • Tommaso Nannicini

Abstract

In many countries, important features of municipal government (such as the electoral system, mayors' salaries, and the number of councillors) depend on whether the municipality is above or below arbitrary population thresholds. Several papers have used a regression discontinuity design (RDD) to measure the effects of these threshold-based policies on political and economic outcomes. Using evidence from France, Germany, and Italy, we highlight two common pitfalls that arise in exploiting population-based policies (confounded treatment and sorting) and we provide guidance for detecting and addressing these pitfalls. Even when these problems are present, population-threshold RDD may be the best available research design for studying the effects of certain policies and political institutions.

Suggested Citation

  • Andrew C. Eggers & Ronny Freier & Veronica Grembi & Tommaso Nannicini, 2015. "Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions," Discussion Papers of DIW Berlin 1503, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1503
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    More about this item

    Keywords

    regression discontinuity design; causal inference; sorting; population thresholds; institutional design;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H19 - Public Economics - - Structure and Scope of Government - - - Other
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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