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Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions

Author

Listed:
  • Eggers, Andrew C.

    (University of Oxford)

  • Freier, Ronny

    (DIW Berlin)

  • Grembi, Veronica

    (University of Milan)

  • Nannicini, Tommaso

    (Bocconi University)

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 (compound 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

  • Eggers, Andrew C. & Freier, Ronny & Grembi, Veronica & Nannicini, Tommaso, 2015. "Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions," IZA Discussion Papers 9553, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9553
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    References listed on IDEAS

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    More about this item

    Keywords

    difference-in-discontinuities; regression discontinuity design; population thresholds;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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