Estimating Treatment Effects Under Bounded Heterogeneity

Soonwoo Kwon and Liyang Sun

Papers from arXiv.org

Abstract: Specifications that impose constant treatment effects are common and can be biased under heterogeneity, whereas fully flexible alternatives can be imprecise or infeasible. Under a bound on the target-weighted variance of treatment effects, this paper proposes a generalized ridge estimator, $\texttt{regulaTE}$, that yields heterogeneity-aware confidence intervals (CIs). The ridge penalty is chosen to minimize the heterogeneity-aware CI length in a homoskedastic Gaussian setting; the resulting CIs are asymptotically valid even when overlap fails. Varying the bound enables sensitivity analysis of departures from constant effects, illustrated in applications to unconfoundedness and staggered adoption designs.

Date: 2025-10, Revised 2026-08
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://arxiv.org/pdf/2510.05454 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2510.05454

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().