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The Devil is in the Tails: Regression Discontinuity Design with Measurement Error in the Assignment Variable

Zhuan Pei and Yi Shen
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Yi Shen: University of Waterloo

Working Papers from Princeton University, Department of Economics, Industrial Relations Section.

Abstract: Identification in a regression discontinuity (RD) design hinges on the discontinuity in the probability of treatment when a covariate (assignment variable) exceeds a known threshold. If the assignment variable is measured with error, however, the discontinuity in the first stage relationship between the probability of treatment and the observed mismeasured assignment variable may disappear. Therefore, the presence of measurement error in the assignment variable poses a challenge to treatment effect identification. This paper provides sufficient conditions for identification when only the mismeasured assignment variable, the treatment status and the outcome variable are observed. We prove identification separately for discrete and continuous assignment variables and study the properties of various estimation procedures. We illustrate the proposed methods in an empirical application, where we estimate Medicaid takeup and its crowdout effect on private health insurance coverage.

Keywords: Regression Discontinuity Design; Measurement Error (search for similar items in EconPapers)
JEL-codes: C10 C18 (search for similar items in EconPapers)
Date: 2016-10
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Related works:
Chapter: The Devil is in the Tails: Regression Discontinuity Design with Measurement Error in the Assignment Variable (2017) Downloads
Working Paper: The Devil is in the Tails: Regression Discontinuity Design with Measurement Error in the Assignment Variable (2016) Downloads
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