Relaxing conditions for local average treatment effect in fuzzy regression discontinuity

Jin young Choi; Myoung jae Lee

doi:10.1016/j.econlet.2018.09.010

Relaxing conditions for local average treatment effect in fuzzy regression discontinuity

Jin young Choi, Myoung jae Lee

Research output: Contribution to journal › Article › peer-review

7 Citations (Scopus)

Abstract

In fuzzy regression discontinuity with a running/forcing variable S and a cutoff c, the identified treatment effect is the ‘effect on compliers at S=c’. This well-known ‘local average treatment effect (LATE)’ interpretation requires (i) a monotonicity condition and (ii) the independence of the potential treatment and potential response variables from S. These assumptions can be violated, however, particularly (ii) when S affects potential variables, which can easily happen in practice. In this paper, we weaken both assumptions so that LATE in fuzzy regression discontinuity has a better chance to hold in the real world, and practitioners can claim their findings in fuzzy regression discontinuity to be LATE.

Original language	English
Pages (from-to)	47-50
Number of pages	4
Journal	Economics Letters
Volume	173
DOIs	https://doi.org/10.1016/j.econlet.2018.09.010
Publication status	Published - 2018 Dec

Bibliographical note

Funding Information:
The authors are grateful to a reviewer for the helpful comments. The research of Myoung-jae Lee has been supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea ( NRF-2017S1A5A2A01025897 ).

Publisher Copyright:
© 2018 Elsevier B.V.

Keywords

Fuzzy regression discontinuity
Local average treatment effect
Moment continuity
Monotonicity condition

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.econlet.2018.09.010

Cite this

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title = "Relaxing conditions for local average treatment effect in fuzzy regression discontinuity",

abstract = "In fuzzy regression discontinuity with a running/forcing variable S and a cutoff c, the identified treatment effect is the {\textquoteleft}effect on compliers at S=c{\textquoteright}. This well-known {\textquoteleft}local average treatment effect (LATE){\textquoteright} interpretation requires (i) a monotonicity condition and (ii) the independence of the potential treatment and potential response variables from S. These assumptions can be violated, however, particularly (ii) when S affects potential variables, which can easily happen in practice. In this paper, we weaken both assumptions so that LATE in fuzzy regression discontinuity has a better chance to hold in the real world, and practitioners can claim their findings in fuzzy regression discontinuity to be LATE.",

keywords = "Fuzzy regression discontinuity, Local average treatment effect, Moment continuity, Monotonicity condition",

author = "Choi, {Jin young} and Lee, {Myoung jae}",

note = "Funding Information: The authors are grateful to a reviewer for the helpful comments. The research of Myoung-jae Lee has been supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea ( NRF-2017S1A5A2A01025897 ). Publisher Copyright: {\textcopyright} 2018 Elsevier B.V.",

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doi = "10.1016/j.econlet.2018.09.010",

language = "English",

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AU - Choi, Jin young

AU - Lee, Myoung jae

N1 - Funding Information: The authors are grateful to a reviewer for the helpful comments. The research of Myoung-jae Lee has been supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea ( NRF-2017S1A5A2A01025897 ). Publisher Copyright: © 2018 Elsevier B.V.

PY - 2018/12

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N2 - In fuzzy regression discontinuity with a running/forcing variable S and a cutoff c, the identified treatment effect is the ‘effect on compliers at S=c’. This well-known ‘local average treatment effect (LATE)’ interpretation requires (i) a monotonicity condition and (ii) the independence of the potential treatment and potential response variables from S. These assumptions can be violated, however, particularly (ii) when S affects potential variables, which can easily happen in practice. In this paper, we weaken both assumptions so that LATE in fuzzy regression discontinuity has a better chance to hold in the real world, and practitioners can claim their findings in fuzzy regression discontinuity to be LATE.

AB - In fuzzy regression discontinuity with a running/forcing variable S and a cutoff c, the identified treatment effect is the ‘effect on compliers at S=c’. This well-known ‘local average treatment effect (LATE)’ interpretation requires (i) a monotonicity condition and (ii) the independence of the potential treatment and potential response variables from S. These assumptions can be violated, however, particularly (ii) when S affects potential variables, which can easily happen in practice. In this paper, we weaken both assumptions so that LATE in fuzzy regression discontinuity has a better chance to hold in the real world, and practitioners can claim their findings in fuzzy regression discontinuity to be LATE.

KW - Fuzzy regression discontinuity

KW - Local average treatment effect

KW - Moment continuity

KW - Monotonicity condition

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Relaxing conditions for local average treatment effect in fuzzy regression discontinuity

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

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