Direct and indirect effects based on difference-in-differences with an application to political preferences following the Vietnam draft lottery

Eva Deuchert, Martin Huber and Mark Schelker

No 473, FSES Working Papers from Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland

Abstract: This paper proposes a difference-in-differences approach for disentangling a total treatment effect on some outcome into a direct effect as well as an indirect effect operating through a binary intermediate variable – or mediator – within strata defined upon how the mediator reacts to the treatment. Imposing random treatment assignment along with specific common trend (and further) assumptions identifies the direct effects on the always and never takers, whose mediator is not affected by the treatment, as well as the direct and indirect effects on the compliers, whose mediator reacts to the treatment. We provide an empirical application based on the Vietnam draft lottery, where we analyse the impact of the random draft lottery number on political preferences. The results suggest that a high draft risk due to the lottery leads to a relative increase in mild preferences for the Republican Party, but has no effect on strong preferences for either party or on policy contents. Moreover, the increase in Republican support is mostly driven by the direct effect.

Keywords: treatment effects; causal mechanisms; direct and indirect effects; Vietnam War lottery; political preferences; difference-indifferences (search for similar items in EconPapers)
JEL-codes: C21 C22 D70 D72 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2017-07-01
New Economics Papers: this item is included in nep-cis, nep-pol and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Direct and Indirect Effects Based on Difference-in-Differences With an Application to Political Preferences Following the Vietnam Draft Lottery (2019)
Working Paper: Direct and Indirect Effects Based on Difference-in-Differences with an Application to Political Preferences Following the Vietnam Draft Lottery (2016)
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