From Late to MTE: Alternative Methods for the Evaluation of Policy Interventions

By T. Cornelissen, Christian Dustmann, A. Raute, Uta Schönberg. Social Science Research Network, 2016

134 citations recorded by the source corpus.

This paper provides an introduction into the estimation of marginal treatment effects (MTE). Compared to the existing surveys on the subject, our paper is less technical and speaks to the applied economist with a solid basic understanding of econometric techniques who would like to use MTE estimation. Our framework of analysis is a generalized Roy model based on the potential outcomes framework, within which we define different treatment effects of interest, and review the well-known case of IV estimation with a discrete instrument resulting in a local average treatment effect (LATE). Turning to IV estimation with a continuous instrument, we demonstrate that the 2SLS estimator may be viewed as a weighted average of LATEs and discuss MTE estimation as an alternative and more informative way of exploiting a continuous instrument. We clarify the assumptions underlying the MTE framework, its relation to the correlated random coefficients model, and illustrate how the MTE estimation is implemented in practice.

Subfields: Political Science and International Relations, Sociology and Political Science, Statistics and Probability

View Paper: https://www.semanticscholar.org/paper/81aa478aaf9bbc0ede6a1612632c24d502b2a17d

Citations in the corpus

• Who Benefits from Universal Child Care? Estimating Marginal Returns to Early Child Care Attendance (2018, unknown): “33 As explained in detail in Cornelissen et al. (2016), t he 2SLS estimator may be viewed as a weighted average of Local Average Treatment Effects across rr’ pairs, when group indicator dummies R i are used as instruments. The overall IV estimate is therefore represen tative for compliers at all val”
• Racial Bias in Bail Decisions ⇤ (2018, unknown): “[25] Cornelissen, Thomas, Christian Dustmann, Anna Raute, and Uta Schönberg, “From LATE to MTE: Alternative Methods for the Evaluation of Policy Interventions,” Labour Economics, 41 (2016), 47-60.”