Difference-in-Differences with a Misclassified Treatment

Akanksha Negi () and Digvijay S. Negi ()
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Akanksha Negi: Monash University
Digvijay S. Negi: Ashoka University

No 121, Working Papers from Ashoka University, Department of Economics

Abstract: This paper studies identification and estimation of the average treatment effect of a latent treated subpopulation in difference-in-difference designs when the observed treatment is differentially (or endogenously) mismeasured for the truth. Common examples include misreporting and mistargeting. We propose a twostep estimator which corrects for the empirically common phenomenon of onesided misclassification in the treatment status. The solution uses a single exclusion restriction embedded in a partial observability probit to point-identify the latent parameter. We demonstrate the method by revisiting two large-scale national programs in India; one where pension benefits are under-reported and second where the program is mistargeted.

Keywords: Difference-in-differences; Heterogeneous; treatment; effects; Misclassification; Panel; data; Repeated; cross-sections (search for similar items in EconPapers)
Pages: 48
Date: 2024-08-29
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Persistent link: https://EconPapers.repec.org/RePEc:ash:wpaper:121

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