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An Economic Approach to Generalize Findings from Regression-Discontinuity Designs

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Abstract

Regression-discontinuity (RD) designs estimate treatment effects at a cutoff. This paper shows that much can be learned about average treatment effects for the treated (ATT), untreated (ATUT), and population (ATE) if the cutoff was chosen to maximize the gain from treatment, net of costs. The ATT must be positive and the RD estimate bounds the ATT from below and the ATUT from above, implying bounds for the ATE. Optimality of the cutoff rules out constant treatment effects. The treatment effect must be increasing at the cutoff, making cutoff optimality testable. The theoretical results are applied to existing RD studies.

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  • Nirav Mehta, 2015. "An Economic Approach to Generalize Findings from Regression-Discontinuity Designs," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20156, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  • Handle: RePEc:uwo:hcuwoc:20156
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