A test of the selection on observables assumption using a discontinuously distributed covariate

Umair Khalil () and Neşe Yıldız

Journal of Econometrics, 2022, vol. 226, issue 2, 423-450

Abstract: We present a test of the selection on observables assumption that neither requires instruments nor excluded covariates from the structural function. Instead, we rely on the presence of a discontinuously distributed variable among the set of controls. We develop formal testing procedures for a non-parametric additively separable model for binary and finite treatment variables. We also outline a nonparametric nonseparable extension. Our test is easy to implement and should be useful in many empirical settings. Specifically, we employ it to study selection concerns in the estimation of the impact of a nutritional aid program for pregnant women on birth weight.

Keywords: Selection on observables; Testing; Partial effects; Essential heterogeneity (search for similar items in EconPapers)
JEL-codes: C12 C14 C21 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:226:y:2022:i:2:p:423-450

DOI: 10.1016/j.jeconom.2021.09.018

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