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Are Bartik Regressions Always Robust to Heterogeneous Treatment Effects?

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  • Clément de Chaisemartin

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Ziteng Lei

    (Renmin University of China = Université Renmin de Chine)

Abstract

Bartik regressions use locations' differential exposure to nationwide sector-level shocks as an instrument to estimate the effect of a location-level treatment on an outcome. We show that under parallel-trends assumptions, Bartik regressions may estimate weighted sums of location-and-period-specific treatment effects, with some negative weights. Accordingly, they may not be robust to heterogeneous effects across locations or periods. We provide simple diagnostic tools researchers may use to assess the robustness of their regression. Finally, we propose alternative correlated-random-coefficient estimators that are more robust to heterogeneous effects than Bartik regressions. We use our results to revisit two empirical applications.

Suggested Citation

  • Clément de Chaisemartin & Ziteng Lei, 2022. "Are Bartik Regressions Always Robust to Heterogeneous Treatment Effects?," Working Papers hal-03873913, HAL.
    • Handle: RePEc:hal:wpaper:hal-03873913
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03873913
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