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A Correction for Regression Discontinuity Designs with Group-Specific Mismeasurement of the Running Variable

Author

Listed:
  • Bartalotti, Otávio

    () (Iowa State University)

  • Brummet, Quentin

    () (NORC at the University of Chicago)

  • Dieterle, Steven G.

    () (University of Edinburgh)

Abstract

When the running variable in a regression discontinuity (RD) design is measured with error, identification of the local average treatment effect of interest will typically fail. While the form of this measurement error varies across applications, in many cases the measurement error structure is heterogeneous across different groups of observations. We develop a novel measurement error correction procedure capable of addressing heterogeneous mismeasurement structures by leveraging auxiliary information. We also provide adjusted asymptotic variance and standard errors that take into consideration the variability introduced by the estimation of nuisance parameters, and honest confidence intervals that account for potential misspecification. Simulations provide evidence that the proposed procedure corrects the bias introduced by heterogeneous measurement error and achieves empirical coverage closer to nominal test size than "naïve" alternatives. Two empirical illustrations demonstrate that correcting for measurement error can either reinforce the results of a study or provide a new empirical perspective on the data.

Suggested Citation

  • Bartalotti, Otávio & Brummet, Quentin & Dieterle, Steven G., 2019. "A Correction for Regression Discontinuity Designs with Group-Specific Mismeasurement of the Running Variable," IZA Discussion Papers 12366, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp12366
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    References listed on IDEAS

    as
    1. Davezies, Laurent & Le Barbanchon, Thomas, 2017. "Regression discontinuity design with continuous measurement error in the running variable," Journal of Econometrics, Elsevier, vol. 200(2), pages 260-281.
    2. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    3. Dieterle, Steven & Bartalotti, Otávio C. & Brummet, Quentin O., 2016. "Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement Error-Corrected RD Approach," ISU General Staff Papers 201604210700001002, Iowa State University, Department of Economics.
    4. Victor Lavy, 2006. "From Forced Busing to Free Choice in Public Schools: Quasi-Experimental Evidence of Individual and General Effects," NBER Working Papers 11969, National Bureau of Economic Research, Inc.
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    Cited by:

    1. repec:bpj:jecome:v:8:y:2019:i:1:p:26:n:2 is not listed on IDEAS
    2. Bartalotti Otávio, 2019. "Regression Discontinuity and Heteroskedasticity Robust Standard Errors: Evidence from a Fixed-Bandwidth Approximation," Journal of Econometric Methods, De Gruyter, vol. 8(1), pages 1-26, January.
    3. Steven Dieterle & Otávio Bartalotti & Quentin Brummet, 2016. "Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement Error-Corrected Regression Discontinuity Approach," CARRA Working Papers 2016-01, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    nonclassical measurement error; regression discontinuity; heterogeneous measurement error;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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