Sorting Around the Discontinuity Threshold: The Case of a Neighbourhood Investment Programme

37 Pages Posted: 4 Apr 2016

See all articles by Sander Gerritsen

Sander Gerritsen

CPB Netherlands Bureau of Economic Policy Analysis

H. Dinand Webbink

University of Amsterdam - Faculty of Economics and Business (FEB)

Bas ter Weel

University of Amsterdam - SEO Economic Research; Institute for the Study of Labor (IZA)

Abstract

This paper investigates the empirical validity of the setup of a large-scale government neighbourhood investment programme in the Netherlands. Selection of neighbourhoods into the programme was determined by their score on a predetermined index. At first sight this is a textbook example for the application of a regression discontinuity (RD) design to estimate the causal effect of the programme on neighbourhood outcomes. However, at the discontinuity threshold we find a large gap in the share of non-Western immigrants. In addition, the pattern of non-compliance with the assignment rule is consistent with investing in neighbourhoods with a high share of non-Western immigrants. Finally, the way of selecting neighbourhoods into the programme could be a likely explanation for the imbalance at the discontinuity threshold. This case illustrates that RD designs can become invalid even when treatment and control groups have no influence on the assignment.

Keywords: regression discontinuity designs, government decision-making processes, neighbourhood investment programmes

JEL Classification: C90, D70, R58

Suggested Citation

Gerritsen, Sander and Webbink, H. Dinand and ter Weel, Bas, Sorting Around the Discontinuity Threshold: The Case of a Neighbourhood Investment Programme. IZA Discussion Paper No. 9838. Available at SSRN: https://ssrn.com/abstract=2757928

Sander Gerritsen (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

H. Dinand Webbink

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Bas Ter Weel

University of Amsterdam - SEO Economic Research ( email )

Roetersstraat 29
Amsterdam, 1018 WB
Netherlands

Institute for the Study of Labor (IZA)

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

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