IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Regression Discontinuity Applications with Rounding Errors in the Running Variable

  • Yingying Dong

    ()

    (Department of Economics, University of California-Irvine)

Many empirical applications of regression discontinuity (RD) models use a running variable that is rounded and hence is discrete, e.g., age in years, or birth weight in ounces. This paper shows that standard RD estimation using a rounded discrete running variable leads to inconsistent estimates of treatment effects, even when the true functional form relating the outcome and the running variable is known and is correctly specified. This paper provides simple formulas to correct for this discretization bias. The proposed approach does not require instrumental variables, but instead uses information regarding the distribution of rounding errors, which is easily obtained and often close to uniform. The proposed approach is applied to estimate the effect of Medicare on insurance coverage in the US, and to investigate the retirement-consumption puzzle in China, utilizing the Chinese mandatory retirement policy.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.economics.uci.edu/files/docs/workingpapers/2011-2012/dong-06.pdf
Download Restriction: no

Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 111206.

as
in new window

Length: 36 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:irv:wpaper:111206
Contact details of provider: Postal: Irvine, CA 92697-3125
Phone: (949) 824-5788
Web page: http://www.economics.uci.edu/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Molinari, Francesca, 2005. "Partial Identification of Probability Distributions with Misclassified Data," Working Papers 05-10, Cornell University, Center for Analytic Economics.
  2. James Banks & Richard Blundell & Sarah Tanner, 1995. "Is there a retirement-savings puzzle?," IFS Working Papers W95/04, Institute for Fiscal Studies.
  3. Edwin Leuven & Hessel Oosterbeek, 2002. "Evaluating the effect of tax deductions on training," Labor and Demography 0205001, EconWPA.
  4. David S. Lee & David Card, 2006. "Regression Discontinuity Inference with Specification Error," NBER Technical Working Papers 0322, National Bureau of Economic Research, Inc.
  5. Lalive, Rafael & van Ours, Jan C & Zweimüller, Josef, 2005. "How Changes in Financial Incentives Affect the Duration of Unemployment," CEPR Discussion Papers 4986, C.E.P.R. Discussion Papers.
  6. Rafael LALIVE, 2006. "How do Extended Benefits affect Unemployment Duration? A Regression Discontinuity Approach," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 06.06, Université de Lausanne, Faculté des HEC, DEEP.
  7. B. Douglas Bernheim & Jonathan Skinner & Steven Weinberg, 1997. "What Accounts for the Variation in Retirement Wealth Among U.S. Households?," Working Papers 97035, Stanford University, Department of Economics.
  8. Susan Chen & Wilbert van der Klaauw, 2006. "The Work Disincentive Effects of the Disability Insurance Program in the 1990s," Working Papers 06-05, Center for Economic Studies, U.S. Census Bureau.
  9. Christopher Carpenter & Carlos Dobkin, 2009. "The Effect of Alcohol Consumption on Mortality: Regression Discontinuity Evidence from the Minimum Drinking Age," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 164-82, January.
  10. A. L. Robb & J. B. Burbidge, 1989. "Consumption, Income, and Retirement," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 522-42, August.
  11. Aprajit Mahajan, 2006. "Identification and Estimation of Regression Models with Misclassification," Econometrica, Econometric Society, vol. 74(3), pages 631-665, 05.
  12. Arthur Lewbel, 2003. "Estimation of Average Treatment Effects With Misclassification," Boston College Working Papers in Economics 556, Boston College Department of Economics, revised 04 Sep 2006.
  13. Michael D. Hurd & Susann Rohwedder, 2008. "The Retirement Consumption Puzzle: Actual Spending Change in Panel Data," NBER Working Papers 13929, National Bureau of Economic Research, Inc.
  14. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
  15. Emma Aguila & Orazio Attanasio & Costas Meghir, 2011. "Changes in Consumption at Retirement: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 1094-1099, August.
  16. Yingying Dong, 2011. "Jumpy or Kinky? Regression Discontinuity without the Discontinuity," Working Papers 111207, University of California-Irvine, Department of Economics.
  17. Ferreira, Fernando, 2010. "You can take it with you: Proposition 13 tax benefits, residential mobility, and willingness to pay for housing amenities," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 661-673, October.
  18. Milligan, Kevin & Lemieux, Thomas, 2006. "Incentive Effects of Social Assistance: A Regression Discontinuity Approach," Analytical Studies Branch Research Paper Series 2006280e, Statistics Canada, Analytical Studies Branch.
  19. Margherita Borella & Flavia Coda Moscarola & Mariacristina Rossi, 2011. "(Un)Expected Retirement and the Consumption Puzzle," CeRP Working Papers 126, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  20. Erich Battistin & Agar Brugiavini & Enrico Rettore & Guglielmo Weber, 2009. "The Retirement Consumption Puzzle: Evidence from a Regression Discontinuity Approach," American Economic Review, American Economic Association, vol. 99(5), pages 2209-26, December.
  21. Frandsen, Brigham R. & Frölich, Markus & Melly, Blaise, 2012. "Quantile treatment effects in the regression discontinuity design," Journal of Econometrics, Elsevier, vol. 168(2), pages 382-395.
  22. David Card & Carlos Dobkin & Nicole Maestas, 2008. "The Impact of Nearly Universal Insurance Coverage on Health Care Utilization: Evidence from Medicare," American Economic Review, American Economic Association, vol. 98(5), pages 2242-58, December.
  23. Eric Edmonds & Kristin Mammen & Douglas L. Miller, 2004. "Rearranging the Family? Income Support and Elderly Living Arrangements in a Low Income Country," NBER Working Papers 10306, National Bureau of Economic Research, Inc.
  24. Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Working Papers 13039, National Bureau of Economic Research, Inc.
  25. David Card & Carlos Dobkin & Nicole Maestas, 2009. "Does Medicare Save Lives?," The Quarterly Journal of Economics, MIT Press, vol. 124(2), pages 597-636, May.
  26. Hu, Yingyao, 2008. "Identification and estimation of nonlinear models with misclassification error using instrumental variables: A general solution," Journal of Econometrics, Elsevier, vol. 144(1), pages 27-61, May.
  27. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
  28. David S. Lee & Justin McCrary, 2005. "Crime, Punishment, and Myopia," NBER Working Papers 11491, National Bureau of Economic Research, Inc.
  29. Rafael Lalive, 2007. "Unemployment Benefits, Unemployment Duration, and Post-Unemployment Jobs: A Regression Discontinuity Approach," American Economic Review, American Economic Association, vol. 97(2), pages 108-112, May.
  30. John Ameriks & Andrew Caplin & John Leahy, 2002. "Retirement Consumption: Insights from a Survey," NBER Working Papers 8735, National Bureau of Economic Research, Inc.
  31. Philip Oreopoulos, 2006. "Estimating Average and Local Average Treatment Effects of Education when Compulsory Schooling Laws Really Matter," American Economic Review, American Economic Association, vol. 96(1), pages 152-175, March.
  32. David Card & Lara D. Shore-Sheppard, 2002. "Using Discontinuous Eligibility Rules to Identify the Effects of the Federal Medicaid Expansions on Low Income Children," NBER Working Papers 9058, National Bureau of Economic Research, Inc.
  33. Battistin, Erich & Chesher, Andrew, 2014. "Treatment effect estimation with covariate measurement error," Journal of Econometrics, Elsevier, vol. 178(2), pages 707-715.
  34. Eric V. Edmonds, 2004. "Does Illiquidity Alter Child Labor and Schooling Decisions? Evidence from Household Responses to Anticipated Cash Transfers in South Africa," NBER Working Papers 10265, National Bureau of Economic Research, Inc.
  35. Yingying Dong & Arthur Lewbel, 2010. "Identifying the Effect of Changing the Policy Threshold in Regression Discontinuity Models," Boston College Working Papers in Economics 759, Boston College Department of Economics, revised 15 Dec 2012.
  36. Raffaele Miniaci & Chiara Monfardini & Guglielmo Weber, 2003. "Is there a retirement consumption puzzle in Italy?," IFS Working Papers W03/14, Institute for Fiscal Studies.
  37. Schwerdt, Guido, 2005. "Why does consumption fall at retirement? Evidence from Germany," Economics Letters, Elsevier, vol. 89(3), pages 300-305, December.
  38. Yingying Dong & Arthur Lewbel, 2011. "Regression Discontinuity Marginal Threshold Treatment Effects," Working Papers 111205, University of California-Irvine, Department of Economics.
  39. Barreca, Alan I. & Guldi, Melanie & Lindo, Jason M. & Waddell, Glen R., 2010. "Running and Jumping Variables in RD Designs: Evidence Based on Race, Socioeconomic Status, and Birth Weights," IZA Discussion Papers 5106, Institute for the Study of Labor (IZA).
  40. Erik Hurst, 2008. "The Retirement of a Consumption Puzzle," NBER Working Papers 13789, National Bureau of Economic Research, Inc.
  41. Steven J. Haider & Melvin Stephens, 2007. "Is There a Retirement-Consumption Puzzle? Evidence Using Subjective Retirement Expectations," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 247-264, May.
  42. Erich Battistin & Barbara Sianesi, 2006. "Misreported schooling and returns to education: evidence from the UK," CeMMAP working papers CWP07/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  43. Charles F. Manski & Elie Tamer, 2002. "Inference on Regressions with Interval Data on a Regressor or Outcome," Econometrica, Econometric Society, vol. 70(2), pages 519-546, March.
  44. Emma Aguila & Orazio P. Attanasio & Costas Meghir, 2008. "Changes in Consumption at Retirement," Working Papers 621, RAND Corporation Publications Department.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:irv:wpaper:111206. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jennifer dos Santos)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.