Identification of Causal Intensive Margin Effects by Difference-in-Difference Methods

Markus Hersche and Elias Moor

No 18/302, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: This paper discusses identification of causal intensive margin effects. The causal intensive margin effect is defined as the treatment effect on the outcome of individuals with a positive outcome irrespective of whether they are treated or not (always-takers or participants). A potential selection problem arises when conditioning on positive outcomes, even if treatment is randomly assigned. We propose to use difference-in-difference methods - conditional on positive outcomes - to estimate causal intensive margin effects. We derive sufficient conditions under which the difference-in-difference methods identify the causal intensive margin effect in a setting with random treatment.

Keywords: Intensive margin effect; difference-in-difference; corner solution models; potential outcomes; policy evaluation (search for similar items in EconPapers)
JEL-codes: C18 C21 C24 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2018-11
New Economics Papers: this item is included in nep-ecm
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