Bounds on the fixed effects estimand in the presence of heterogeneous assignment propensities

Macartan Humphreys

EconStor Open Access Articles and Book Chapters, 2025, vol. 13, issue 1, No 20240040, 7 pages

Abstract: Fixed effects estimation, with linear controls for stratum membership, is often used to estimate treatment effects when assignment propensities differ across strata. In the presence of heterogeneity in treatment effects across strata, this estimator does not target the average treatment effect, however. Indeed, the implied estimand can range anywhere from the lowest to the highest stratum-level average effect. To facilitate the interpretation of results using this approach, I establish that if stratum-level average effects are monotonic in the shares assigned to treatment, then the fixed effects estimand lies between the average treatment effect for the treated and the average treatment effect for the controls.

Keywords: causal inference; least squares; fixed effects; heterogeneous assignment propensities; bias (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:324005

DOI: 10.1515/jci-2024-0040

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