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Testing monotonicity of conditional treatment effects under regression discontinuity designs

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  • Yu‐Chin Hsu
  • Shu Shen

Abstract

Researchers are often interested in the relationship between treatment effects and observed individual heterogeneity. This paper proposes the first nonparametric monotonicity test for conditional treatment effects under the popular regression discontinuity framework. The proposed test examines whether the average treatment effect or the local average treatment effect has a monotonic relationship with some of the observed individual characteristics. We show consistency and asymptotic uniform size control of the proposed test, and apply the test to study treatment effect heterogeneity in two empirical settings.

Suggested Citation

  • Yu‐Chin Hsu & Shu Shen, 2021. "Testing monotonicity of conditional treatment effects under regression discontinuity designs," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(3), pages 346-366, April.
    • Handle: RePEc:wly:japmet:v:36:y:2021:i:3:p:346-366
    DOI: 10.1002/jae.2805
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