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Regression Discontinuity in Time: Considerations for Empirical Applications

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  • Catherine Hausman
  • David S. Rapson

Abstract

Recent empirical work in several economic fields, particularly environmental and energy economics, has adapted the regression discontinuity (RD) framework to applications where time is the running variable and treatment begins at a particular threshold in time. In this guide for practitioners, we discuss several features of this “Regression Discontinuity in Time” (RDiT) framework that differ from the more standard cross-sectional RD framework. First, many applications (particularly in environmental economics) lack cross-sectional variation and are estimated using observations far from the temporal threshold. This common empirical practice is hard to square with the assumptions of a cross-sectional RD, which is conceptualized for an estimation bandwidth shrinking even as the sample size increases. Second, estimates may be biased if the time-series properties of the data are ignored (for instance in the presence of an autoregressive process), or more generally if short-run and long-run effects differ. Finally, tests for sorting or bunching near the threshold are often irrelevant, making the framework closer to an event study than a regression discontinuity design. Based on these features and motivated by hypothetical examples using air quality data, we offer suggestions for the empirical researcher wishing to use the RD in time framework.

Suggested Citation

  • Catherine Hausman & David S. Rapson, 2017. "Regression Discontinuity in Time: Considerations for Empirical Applications," NBER Working Papers 23602, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23602
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    References listed on IDEAS

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    Cited by:

    1. Mense, Andreas & Michelsen, Claus & Cholodilin, Konstantin A., 2017. "Empirics on the causal effects of rent control in Germany," FAU Discussion Papers in Economics 24/2017, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    2. Benjamin Hansen & Keaton Miller & Caroline Weber, 2017. "The Grass is Greener on the Other Side: How Extensive is the Interstate Trafficking of Recreational Marijuana?," NBER Working Papers 23762, National Bureau of Economic Research, Inc.
    3. repec:eee:jeeman:v:89:y:2018:i:c:p:255-277 is not listed on IDEAS
    4. Brachert, Matthias, 2018. "The regional effects of professional sports franchises: Causal evidence from four European football leagues," IWH Discussion Papers 10/2018, Halle Institute for Economic Research (IWH).

    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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