Regression discontinuity design with many thresholds

By Marinho Bertanha. Journal of Econometrics, 2017

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Numerous empirical studies employ regression discontinuity designs with multiple cutoffs and heterogeneous treatments. A common practice is to normalize all the cutoffs to zero and estimate one effect. This procedure identifies the average treatment effect (ATE) on the observed distribution of individuals local to existing cutoffs. However, researchers often want to make inferences on more meaningful ATEs computed over general counterfactual distributions of individuals rather than simply the observed distribution of individuals local to existing cutoffs. This paper proposes a root-n consistent and asymptotically normal estimator for such ATEs when heterogeneity follows a non-parametric function of cutoff characteristics in the sharp case. It shows that identification in the fuzzy case with multiple cutoffs is impossible unless heterogeneity follows a finite dimensional function of cutoff characteristics. Under parametric heterogeneity, this paper proposes an ATE estimator for the fuzzy case that optimally combines observations to minimize its mean squared error.

Subfields: Control and Systems Engineering, Statistics and Probability

View Paper: https://www.semanticscholar.org/paper/3e6292de9da7d4d60fd5e0c1f1a19d9c180275ae

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