Estimation of Average Treatment Effects Using Panel Data when Treatment Effects Are Heterogeneous by Unobserved Fixed Effects
Shosei Sakaguchi ()
Additional contact information
Shosei Sakaguchi: Graduate School of Economics, Kyoto University
No 970, KIER Working Papers from Kyoto University, Institute of Economic Research
This paper proposes a new approach to identifying and estimating the time-varying average treatment effect (ATE) using panel data to control for unobserved fixed effects. The proposed approach allows for treatment effect heterogeneity induced by unobserved fixed effects. Under such heterogeneity, while existing panel data approaches identify and estimate the ATEs only for limited subpopulations, the proposed approach identifies and estimates the ATE for the entire population. The proposed approach requires two conditions: (i) The proportion of additive unobserved fixed effects terms in the treated and untreated potential outcome models is constant across units and time, and (ii) We have exogenous variables that correlate with unobserved fixed effects conditional on the assigned treatment. Under these conditions, the approach first identifies observed covariates parameters and the proportion of fixed effects terms. The approach then identifies the ATE by combining observed data with them to predict and adjust unobserved potential outcome for each treated and untreated unit. Based on the identification results, this paper proposes an estimator of the ATE, which takes the form of a generalized method of moments. I apply the estimator to estimate the impact of a mother smoking during pregnancy on her child's birth weight.
Keywords: Potential outcome; Program evaluation; Time-varying treatment; Treatment effect heterogeneity; Unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: C21 C23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kyo:wpaper:970
Access Statistics for this paper
More papers in KIER Working Papers from Kyoto University, Institute of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Ryo Okui (). This e-mail address is bad, please contact .