Broken or Fixed Effects?

Gibbons Charles E. (), Juan Carlos Suárez Serrato and Urbancic Michael B.
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Gibbons Charles E.: The Brattle Group, 201 Mission Street Suite 2800, San Francisco, CA 94105, USA
Urbancic Michael B.: Department of Economics, University of Oregon, Eugene, OR, USA

Journal of Econometric Methods, 2019, vol. 8, issue 1, 12

Abstract: We replicate eight influential papers to provide empirical evidence that, in the presence of heterogeneous treatment effects, OLS with fixed effects (FE) is generally not a consistent estimator of the average treatment effect (ATE). We propose two alternative estimators that recover the ATE in the presence of group-specific heterogeneity. We document that heterogeneous treatment effects are common and the ATE is often statistically and economically different from the FE estimate. In all but one of our replications, there is statistically significant treatment effect heterogeneity and, in six, the ATEs are either economically or statistically different from the FE estimates.

Keywords: average treatment effects; fixed effects models; heterogeneous treatment effects (search for similar items in EconPapers)
JEL-codes: C18 C21 C52 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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Working Paper: Broken or Fixed Effects? (2014)
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DOI: 10.1515/jem-2017-0002

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