Regression Discontinuity in Time: Considerations for Empirical Applications

By Catherine Hausman, D. Rapson. Annual Review of Resource Economics, 2018

520 citations recorded by the source corpus.

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 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.

Subfields: Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/75a107faae8609b5284034998c6f7050bc9a799e

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In Management Science and Operations Research

1. Kannan Srinivasan
2. Xiao Liu
3. Dokyun Lee
4. Michael P. Keane

Citations in the corpus

• Large-Scale Cross-Category Analysis of Consumer Review Content on Sales Conversion Leveraging Deep Learning (2019, methodology): “Essentially, using the terminology in the literature of regression discontinuity in time (Hausman and Rapson 2017; Lee and Thomas 2010), we let the review post date be c (short for cutoff).”
• Regression Discontinuity Designs (2021, unknown): “Before-and-after (or event) studies are also sometimes portrayed as “RD designs in time” where the time index is taken as the score variable and the analysis is conducted using RD methods (Hausman and Rapson, 2018).”