Fuzzy Differences-in-Differences

Clément de Chaisemartin and X D’HaultfŒuille
Authors registered in the RePEc Author Service: Xavier D'Haultfoeuille

The Review of Economic Studies, 2018, vol. 85, issue 2, 999-1028

Abstract: Difference-in-differences (DID) is a method to evaluate the effect of a treatment. In its basic version, a “control group” is untreated at two dates, whereas a “treatment group” becomes fully treated at the second date. However, in many applications of the DID method, the treatment rate only increases more in the treatment group. In such fuzzy designs, a popular estimator of the treatment effect is the DID of the outcome divided by the DID of the treatment. We show that this ratio identifies a local average treatment effect only if the effect of the treatment is stable over time, and if the effect of the treatment is the same in the treatment and in the control group. We then propose two alternative estimands that do not rely on any assumption on treatment effects, and that can be used when the treatment rate does not change over time in the control group. We prove that the corresponding estimators are asymptotically normal. Finally, we use our results to reassess the returns to schooling in Indonesia.

Keywords: Differences-in-differences; Control group; Local average treatment effects; Changes-in-changes; Partial identification; Returns to education (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (84)

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Related works:
Working Paper: Fuzzy differences-in-differences (2015)
Working Paper: Fuzzy differences-in-differences (2015)
Working Paper: Fuzzy Differences-in-Differences (2015)
Working Paper: Fuzzy differences in differences (2012)
Working Paper: Fuzzy differences in differences (2012)
Working Paper: Fuzzy Differences in Differences (2011)
Working Paper: Fuzzy Differences in Differences (2010)
Working Paper: Fuzzy Differences-in-Differences
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:85:y:2018:i:2:p:999-1028.

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The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

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