Decomposing Treatment Effect Variation
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CitationDing, Peng, Avi Feller, and Luke Miratrix. 2018. “Decomposing Treatment Effect Variation.” Journal of the American Statistical Association (January 15): 0–0. doi:10.1080/01621459.2017.1407322.
AbstractUnderstanding and characterizing treatment effect variation in randomized experiments has become essential for going beyond the "black box" of the average treatment effect. Nonetheless, traditional statistical approaches often ignore or assume away such variation. In the context of a randomized experiment, this paper proposes a framework for decomposing overall treatment effect variation into a systematic component that is explained by observed covariates, and a remaining idiosyncratic component. Our framework is fully randomization-based, with estimates of treatment effect variation that are fully justified by the randomization itself. Our framework can also account for noncompliance, which is an important practical complication. We make several key contributions. First, we show that randomization-based estimates of systematic variation are very similar in form to estimates from fully-interacted linear regression and two stage least squares. Second, we use these estimators to develop an omnibus test for systematic treatment effect variation, both with and without noncompliance. Third, we propose an $R^2$-like measure of treatment effect variation explained by covariates and, when applicable, noncompliance. Finally, we assess these methods via simulation studies and apply them to the Head Start Impact Study, a large-scale randomized experiment.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:34785398
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