Estimation of Heterogeneous Treatment Effects on Hazard Rates

37 Pages Posted: 8 Mar 2010

See all articles by Simen Gaure

Simen Gaure

University of Oslo - Ragnar Frisch Centre for Economic Research

Knut Roed

Ragnar Frisch Centre for Economic Research; IZA Institute of Labor Economics

Gerard J. van den Berg

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Tao Zhang

Ragnar Frisch Centre for Economic Research

Abstract

Consider a setting where a treatment that starts at some point during a spell (e.g. in unemployment) may impact on the hazard rate of the spell duration, and where the impact may be heterogeneous across subjects. We provide Monte Carlo evidence on the feasibility of estimating the distribution of treatment effects from duration data with selectivity, by means of a nonparametric maximum likelihood estimator with unrestricted numbers of mass points for the heterogeneity distribution. We find that specifying the treatment effect as homogenous may yield misleading average results if the true effects are heterogeneous, even when the sorting into treatment is appropriately accounted for. Specifying the treatment effect as a random coefficient allows for precise estimation of informative average treatment effects including the program's overall impact on the mean duration.

Keywords: duration analysis, unobserved heterogeneity, program evaluation, nonparametric estimation, Monte Carlo simulation, timing of events, random effects

JEL Classification: C31, C41, J64, C63

Suggested Citation

Gaure, Simen and Røed, Knut and van den Berg, Gerard J. and Zhang, Tao, Estimation of Heterogeneous Treatment Effects on Hazard Rates. IZA Discussion Paper No. 4794. Available at SSRN: https://ssrn.com/abstract=1566343

Simen Gaure (Contact Author)

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Knut Røed

Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0349 Oslo
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Gerard J. Van den Berg

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6132 (Phone)
+32 20 444 6020 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Tao Zhang

Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0349 Oslo
Norway
+47-22958816 (Phone)
+47-22958825 (Fax)

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