Quasi-Experimental Shift-Share Research Designs

85 Pages Posted: 17 Sep 2018

See all articles by Kirill Borusyak

Kirill Borusyak

Princeton University - International Economics Section

Peter Hull

University of Chicago - Becker Friedman Institute for Economics

Xavier Jaravel

London School of Economics & Political Science (LSE) - Department of Economics

Date Written: September 2018

Abstract

Many studies use shift-share (or “Bartik”) instruments, which average a set of shocks with exposure share weights. We provide a new econometric framework for such designs in which identification follows from the quasi-random assignment of shocks, allowing exposure shares to be endogenous. This framework is centered around a numerical equivalence: conventional shift-share instrumental variable (SSIV) regression coefficients are equivalently obtained from a transformed regression where the shocks are used directly as an instrument. This equivalence implies a shock-level translation of the SSIV exclusion restriction, which holds when shocks are as-good-as-randomly assigned and large in number, with sufficient dispersion in their average exposure. We discuss and illustrate several practical insights delivered by this framework.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Borusyak, Kirill and Hull, Peter and Jaravel, Xavier, Quasi-Experimental Shift-Share Research Designs (September 2018). NBER Working Paper No. w24997. Available at SSRN: https://ssrn.com/abstract=3246820

Kirill Borusyak (Contact Author)

Princeton University - International Economics Section ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://https://scholar.harvard.edu/borusyak

Peter Hull

University of Chicago - Becker Friedman Institute for Economics ( email )

Chicago, IL 60637
United States

Xavier Jaravel

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
7456842728 (Phone)
NW12AR (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
7
Abstract Views
100
PlumX Metrics