New Evidence on Linear Regression and Treatment Effect Heterogeneity

Tymon Słoczyński

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper I provide new evidence on the implications of treatment effect heterogeneity for least squares estimation when the effects are inappropriately assumed to be homogenous. I prove that under a set of benchmark assumptions linear regression provides a consistent estimator of the population average treatment effect on the treated times the population proportion of the nontreated individuals plus the population average treatment effect on the nontreated times the population proportion of the treated individuals. Consequently, in many empirical applications the linear regression estimates might not be close to any of the standard average treatment effects of interest.

Keywords: treatment effects; linear regression; ordinary least squares; decomposition methods (search for similar items in EconPapers)
JEL-codes: C01 C21 C31 (search for similar items in EconPapers)
Date: 2012-06-27
New Economics Papers: this item is included in nep-ecm
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Citations: View citations in EconPapers (3)

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https://mpra.ub.uni-muenchen.de/39524/1/MPRA_paper_39524.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/60810/8/MPRA_paper_60810.pdf revised version (application/pdf)

Related works:
Working Paper: New Evidence on Linear Regression and Treatment Effect Heterogeneity (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:39524

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