Regression Discontinuity Applications with Rounding Errors in the Running Variable

Yingying Dong

No 111206, Working Papers from University of California-Irvine, Department of Economics

Abstract: Many empirical applications of regression discontinuity (RD) models use a running variable that is rounded and hence is discrete, e.g., age in years, or birth weight in ounces. This paper shows that standard RD estimation using a rounded discrete running variable leads to inconsistent estimates of treatment effects, even when the true functional form relating the outcome and the running variable is known and is correctly specified. This paper provides simple formulas to correct for this discretization bias. The proposed approach does not require instrumental variables, but instead uses information regarding the distribution of rounding errors, which is easily obtained and often close to uniform. The proposed approach is applied to estimate the effect of Medicare on insurance coverage in the US, and to investigate the retirement-consumption puzzle in China, utilizing the Chinese mandatory retirement policy.

Keywords: Regression discontinuity; Rounding; Rounding errors; Discrete running variable (search for similar items in EconPapers)
JEL-codes: C21 C26 I18 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2012-01
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 (8)

Downloads: (external link)
https://www.economics.uci.edu/files/docs/workingpapers/2011-2012/dong-06.pdf (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:irv:wpaper:111206

Access Statistics for this paper

More papers in Working Papers from University of California-Irvine, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Melissa Valdez ().