On Recoding Ordered Treatments as Binary Indicators

Evan K. Rose and Yotam Shem-Tov

No 32234, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Researchers using instrumental variables to investigate ordered treatments often recode treatment into an indicator for any exposure. We investigate this estimand under the assumption that the instruments shift compliers from no treatment to some but not from some treatment to more. We show that when there are extensive margin compliers only (EMCO) this estimand captures a weighted average of treatment effects that can be partially unbundled into each complier group's potential outcome means. We also establish an equivalence between EMCO and a two-factor selection model and apply our results to study treatment heterogeneity in the Oregon Health Insurance Experiment.

JEL-codes: C01 C26 (search for similar items in EconPapers)
Date: 2024-03
New Economics Papers: this item is included in nep-exp
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