Treatment Interactions with Non-Experimental Data in Stata

Stata Journal, 11 (4), pp. 545-555

University of Bath Economics Research Paper No. 10/10

11 Pages Posted: 24 Sep 2010 Last revised: 16 Oct 2013

Graham K. Brown

University of Bath - Department of Social & Policy Sciences

Thanos Mergoupis

University of Bath - Department of Economics

Date Written: September 23, 2010

Abstract

Treatment effects may vary with the observed characteristics of the treated, often with important implications. In the context of experimental data, a growing literature deals with the problem of specifying treatment interaction terms that most effectively capture this variation. Some of the results of this literature are now implemented in Stata. With non-experimental (observational) data, and in particular when selection into treatment depends on unmeasured factors, treatment effects can be estimated using Stata's treatreg command. Although not originally designed for this purpose, treatreg can be used to consistently estimate treatment interactions parameters. In the presence of interactions, however, adjustments are required to generate predicted values and estimate the Average Treatment Effect (ATE). This paper introduces commands that perform this adjustment for the case of multiplicative interactions and shows the adjustment that is required for more complicated interactions.

Keywords: Treatment-Effects Models, Interaction Terms

JEL Classification: C31, C87

Suggested Citation

Brown, Graham K. and Mergoupis, Thanos, Treatment Interactions with Non-Experimental Data in Stata (September 23, 2010). Stata Journal, 11 (4), pp. 545-555; University of Bath Economics Research Paper No. 10/10. Available at SSRN: https://ssrn.com/abstract=1681495 or http://dx.doi.org/10.2139/ssrn.1681495

Graham K. Brown

University of Bath - Department of Social & Policy Sciences ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

Thanos Mergoupis (Contact Author)

University of Bath - Department of Economics ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

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