Downloads: 226

Files in This Item:
File Description SizeFormat 
DP910.pdf388.55 kBAdobe PDFView/Open
Title: The Effect of Measurement Error in the Sharp Regression Discontinuity Design
Authors: Yanagi, Takahide  kyouindb  KAKEN_id
Keywords: Regression discontinuity designs
classical measurement error
nonparametric methods
local polynomial regressions
Issue Date: Dec-2014
Publisher: Institute of Economic Research, Kyoto University
Journal title: KIER Discussion Paper
Volume: 910
Abstract: This paper develops a nonparametric analysis for the sharp regression discontinuity (RD) design in which the continuous forcing variable may contain measurement error. We show that if the observable forcing variable contains measurement error, this error causes severe identification bias for the average treatment effect given the "true" forcing variable at the discontinuity point. The bias is critical in the sense that even if there is a significant causal effect, researchers are misled to the incorrect conclusion of no causal effect. Furthermore, the measurement error leads the conditional probability of the treatment to be continuous at the threshold. To investigate the average treatment effect using the mismeasured forcing variable, we propose an approximation using the small error variance approximation (SEVA) originally developed by Chesher (1991). Based on the SEVA, the average treatment effect is approximated up to the order of the variance of the measurement error using an identified parameter when the variance is small. We also develop an estimation procedure for the parameter that approximates the average treatment effect based on local polynomial regressions and the kernel density estimation. Monte Carlo simulations reveal the severity of the identification bias caused by the measurement error and demonstrate that our approximate analysis is successful.
Appears in Collections:KIER Discussion Paper (English)

Show full item record

Export to RefWorks

Export Format: 

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.