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Design and Analysis of Cluster-Randomized Field Experiments in Panel Data Settings

Author

Listed:
  • Bharat Chandar
  • Ali Hortacsu
  • John List
  • Ian Muir
  • Jeffrey Wooldridge

Abstract

Field experiments conducted with the village, city, state, region, or even country as the unit of randomization are becoming commonplace in the social sciences. While convenient, subsequent data analysis may be complicated by the constraint on the number of clusters in treatment and control. Through a battery of Monte Carlo simulations, we examine best practices for estimating unit-level treatment effects in cluster-randomized field experiments, particularly in settings that generate short panel data. In most settings we consider, unit-level estimation with unit fixed effects and cluster-level estimation weighted by the number of units per cluster tend to be robust to potentially problematic features in the data while giving greater statistical power. Using insights from our analysis, we evaluate the effect of a unique field experiment: a nationwide tipping field experiment across markets on the Uber app. Beyond the import of showing how tipping affects aggregate outcomes, we provide several insights on aspects of generating and analyzing cluster-randomized experimental data when there are constraints on the number of experimental units in treatment and control.

Suggested Citation

  • Bharat Chandar & Ali Hortacsu & John List & Ian Muir & Jeffrey Wooldridge, 2019. "Design and Analysis of Cluster-Randomized Field Experiments in Panel Data Settings," Natural Field Experiments 00681, The Field Experiments Website.
  • Handle: RePEc:feb:natura:00681
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    References listed on IDEAS

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    1. Conlin, Michael & Lynn, Michael & O'Donoghue, Ted, 2003. "The norm of restaurant tipping," Journal of Economic Behavior & Organization, Elsevier, vol. 52(3), pages 297-321, November.
    2. Hansen, Christian B., 2007. "Generalized least squares inference in panel and multilevel models with serial correlation and fixed effects," Journal of Econometrics, Elsevier, vol. 140(2), pages 670-694, October.
    3. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    4. Cody Cook & Rebecca Diamond & Jonathan Hall & John A. List & Paul Oyer, 2018. "The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers," NBER Working Papers 24732, National Bureau of Economic Research, Inc.
    5. Lynn, Michael, 2016. "Why are we more likely to tip some service occupations than others? Theory, evidence, and implications," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 134-150.
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    Cited by:

    1. Bharat Chandar & Uri Gneezy & John List & Ian Muir, 2019. "The Drivers of Social Preferences: Evidence from a Nationwide Tipping Field Experiment," Natural Field Experiments 00680, The Field Experiments Website.
    2. Basil Halperin & Benjamin Ho & John List & Ian Muir, 2018. "Toward an understanding of the economics of apologies: evidence from a large-scale natural field experiment," Natural Field Experiments 00644, The Field Experiments Website.

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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