Abstract
In typical regression discontinuity, a running variable (or ‘score’) crosses a cutoff to determine a treatment. There are, however, many regression discontinuity cases where multiple scores have to cross all of their cutoffs to get treated. One approach to deal with these cases is one-dimensional localization using a single score on the subpopulation with all the other scores already crossing the cutoffs (“conditional one-dimensional localization approach, CON”), which is, however, inconsistent when partial effects are present which occur when some, but not all, scores cross their cutoffs. Another approach is multi-dimensional localization explicitly allowing for partial effects, which is, however, less efficient than CON due to more localizations than in CON. We propose a minimum distance estimator that is at least as efficient as CON, yet consistent even when partial effects are present. A simulation study demonstrates these characteristics of the minimum distance estimator.
| Original language | English |
|---|---|
| Pages (from-to) | 10-14 |
| Number of pages | 5 |
| Journal | Economics Letters |
| Volume | 162 |
| DOIs | |
| Publication status | Published - Jan 2018 |
| Externally published | Yes |
Free Keywords
- Minimum distance estimator
- Multiple running variables
- Regression discontinuity
ASJC Scopus subject areas
- Finance
- Economics and Econometrics