Broken or Fixed Effects? / Charles E. Gibbons, Juan Carlos Suárez Serrato, Michael B. Urbancic.

Format:

Book

Author/Creator:

Gibbons, Charles E.

Contributor:

Suárez Serrato, Juan Carlos.

Urbancic, Michael B.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20342.

NBER working paper series no. w20342

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

We replicate eight influential papers to provide empirical evidence that, in the presence of heterogeneous treatment effects, OLS with fixed effects (FE) is generally not a consistent estimator of the average treatment effect (ATE). We propose two alternative estimators that recover the ATE in the presence of group-specific heterogeneity. We document that heterogeneous treatment effects are common and the ATE is often statistically and economically different from the FE estimate. In all but one of our replications, there is statistically significant treatment effect heterogeneity and, in six, the ATEs are either economically or statistically different from the FE estimates.

Notes:

July 2014.

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