When Can We Trust Population Thresholds in Regression Discontinuity Designs?

31 Pages Posted: 30 Jul 2011

See all articles by Florian Ade

Florian Ade

Humboldt University of Berlin - Faculty of Economics

Ronny Freier

Stockholm School of Economics

Date Written: June 2011

Abstract

A recent literature has used variation just around deterministic legislative population thresholds to identify the causal effects of institutional changes. This paper reviews the use of regression discontinuity designs using such population thresholds. Our concern involves three arguments: (1) simultaneous exogenous (co-)treatment, (2) simultaneous endogenous choices and (3) manipulation and precise control over population measures. Revisiting the study by Egger and Koethenbuerger (2010), who analyse the relationship between council size and government spending, we present new evidence that these three concerns do matter for causal analysis. Our results suggest that empirical designs using population thresholds are only to be used with utmost care and confidence in the precise institutional setting.

Keywords: Regression discontinuity design, population thresholds, local elections, government spending

JEL Classification: C2, D7, H7

Suggested Citation

Ade, Florian and Freier, Ronny, When Can We Trust Population Thresholds in Regression Discontinuity Designs? (June 2011). DIW Berlin Discussion Paper No. 1136, Available at SSRN: https://ssrn.com/abstract=1898547 or http://dx.doi.org/10.2139/ssrn.1898547

Florian Ade

Humboldt University of Berlin - Faculty of Economics ( email )

Spandauer Strasse 1
Berlin
Germany

Ronny Freier (Contact Author)

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

HOME PAGE: http://www.hhs.se/Faculty/showperson.htm?personid=1591

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
144
Abstract Views
1,520
Rank
375,875
PlumX Metrics