Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions

56 Pages Posted: 26 Dec 2015

See all articles by Andrew C. Eggers

Andrew C. Eggers

University of Oxford

Ronny Freier

Stockholm School of Economics

Veronica Grembi

Sapienza University of Rome - Department of Earth Sciences and Forecasting Research Center, Prevention and Control of Geological Risks

Tommaso Nannicini

Bocconi University - Department of Economics; IZA Institute of Labor Economics

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Abstract

In many countries, important features of municipal government (such as the electoral system, mayors' salaries, and the number of councillors) depend on whether the municipality is above or below arbitrary population thresholds. Several papers have used a regression discontinuity design (RDD) to measure the effects of these threshold-based policies on political and economic outcomes. Using evidence from France, Germany, and Italy, we highlight two common pitfalls that arise in exploiting population-based policies (compound treatment and sorting) and we provide guidance for detecting and addressing these pitfalls. Even when these problems are present, population-threshold RDD may be the best available research design for studying the effects of certain policies and political institutions.

Keywords: regression discontinuity design, difference-in-discontinuities, population thresholds

JEL Classification: C21, D72

Suggested Citation

Eggers, Andrew C. and Freier, Ronny and Grembi, Veronica and Nannicini, Tommaso, Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions. IZA Discussion Paper No. 9553, Available at SSRN: https://ssrn.com/abstract=2708366 or http://dx.doi.org/10.2139/ssrn.2708366

Andrew C. Eggers (Contact Author)

University of Oxford ( email )

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Oxford, Oxfordshire OX1 4AU
United Kingdom

Ronny Freier

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

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Veronica Grembi

Sapienza University of Rome - Department of Earth Sciences and Forecasting Research Center, Prevention and Control of Geological Risks ( email )

Rome
Italy

Tommaso Nannicini

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

IZA Institute of Labor Economics

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

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