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External Treatment Effects and Program Implementation Bias


  • Tomas J. Philipson


This paper discusses the definition and identification of external treatment effects and experimental designs capable of detecting these effects. External effects occur when the outcome of a given individual is affected by the treatment assignments of other individuals. The paper argues that two-stage randomization schemes, which randomize allocation of treatments across communities and randomizes the treatments themselves within communities, are useful for identifying private and external treatment effects. The importance of external treatment effects are illustrated in the context of several health economics applications: the impact of R&D subsidies, smoking prevention programs for youth, and the evaluation of HIV-prevention programs currently taking place in Africa.

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  • Tomas J. Philipson, 2000. "External Treatment Effects and Program Implementation Bias," NBER Technical Working Papers 0250, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberte:0250 Note: TWP

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    References listed on IDEAS

    1. Arnott, Richard & Rowse, John, 1987. "Peer group effects and educational attainment," Journal of Public Economics, Elsevier, vol. 32(3), pages 287-305, April.
    2. Chew, Soo Hong, 1983. "A Generalization of the Quasilinear Mean with Applications to the Measurement of Income Inequality and Decision Theory Resolving the Allais Paradox," Econometrica, Econometric Society, vol. 51(4), pages 1065-1092, July.
    3. Henderson, Vernon & Mieszkowski, Peter & Sauvageau, Yvon, 1978. "Peer group effects and educational production functions," Journal of Public Economics, Elsevier, vol. 10(1), pages 97-106, August.
    4. Tor Jakob Klette & Jarle M√łen & Zvi Griliches, 1999. "Do Subsidies to Commercial R&D Reduce Market Failures? Microeconomic Evaluation Studies," NBER Working Papers 6947, National Bureau of Economic Research, Inc.
    5. Charles F. Manski, 1997. "The Mixing Problem in Programme Evaluation," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 537-553.
    6. Summers, Anita A & Wolfe, Barbara L, 1977. "Do Schools Make a Difference?," American Economic Review, American Economic Association, vol. 67(4), pages 639-652, September.
    7. James J. Heckman & Lance Lochner & Christopher Taber, 1999. "General Equilibrium Cost Benefit Analysis of Education and Tax Policies," NBER Working Papers 6881, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Edwin Leuven & Hessel Oosterbeek, 2004. "Evaluating the Effect of Tax Deductions on Training," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 461-488, April.
    2. Rokhaya Dieye & Habiba Djebbari & Felipe Barrera-Osorio, 2014. "Accounting for Peer Effects in Treatment Response," AMSE Working Papers 1435, Aix-Marseille School of Economics, Marseille, France, revised Jul 2014.
    3. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2000. "The returns to education : a review of evidence, issues and deficiencies in the literature," Open Access publications 10197/670, School of Economics, University College Dublin.
    4. Michael A. Boozer & Stephen E. Cacciola, 2001. "Inside the 'Black Box' of Project STAR: Estimation of Peer Effects Using Experimental Data," Working Papers 832, Economic Growth Center, Yale University.
    5. Angelucci, Manuela & De Giorgi, Giacomo, 2006. "Indirect Effects of an Aid Program: The Case of Progresa and Consumption," IZA Discussion Papers 1955, Institute for the Study of Labor (IZA).
    6. Edwin Leuven & Hessel Oosterbeek & Bas van der Klaauw, 2010. "The Effect of Financial Rewards on Students' Achievement: Evidence from a Randomized Experiment," Journal of the European Economic Association, MIT Press, vol. 8(6), pages 1243-1265, December.
    7. Manuela Angelucci & Giacomo De Giorgi, 2009. "Indirect Effects of an Aid Program: How Do Cash Transfers Affect Ineligibles' Consumption?," American Economic Review, American Economic Association, vol. 99(1), pages 486-508, March.
    8. Malani, Anup, 2008. "Patient enrollment in medical trials: Selection bias in a randomized experiment," Journal of Econometrics, Elsevier, vol. 144(2), pages 341-351, June.

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