Bayesian Analysis of Treatment Effects in an Ordered Potential Outcomes Model

Mingliang Li and Justin Tobias ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: We describe a new Bayesian estimation algorithm for fitting a binary treatment, ordered outcome selection model in a potential outcomes framework. We show how recent advances in simulation methods, namely {\it data augmentation}, the {\it Gibbs sampler} and the {\it Metropolis-Hastings algorithm}, can be used to fit this model efficiently, and also introduce a reparameterization to help accelerate the convergence of our posterior simulator. Several computational strategies which allow for non-Normality are also discussed. Conventional ``treatment effects'' such as the Average Treatment Effect (ATE), the effect of treatment on the treated (TT) and the Local Average Treatment Effect (LATE) are derived for this specific model, and Bayesian strategies for calculating these treatment effects are introduced. Finally, we review how one can potentially learn (or at least bound) the non-identified cross-regime correlation parameter and use this learning to calculate (or bound) parameters of interest beyond mean treatment effects.

Date: 2008-01-01
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Citations: View citations in EconPapers (8)

Published in Advances in Econometrics 2008, vol. 21

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:12429

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