Optimality of Matched-Pair Designs in Randomized Controlled Trials
32 Pages Posted: 15 Dec 2019 Last revised: 9 May 2022
Date Written: April 11, 2022
In randomized controlled trials, treatment is often assigned by stratified randomization. I show that among all stratified randomization schemes, a certain matched-pair design achieves the maximum statistical precision for estimating the average treatment effect. In an important special case, the optimal design pairs units according to the baseline values of the primary outcome variable of interest. In a simulation study, such a design lowers the standard error by an average of 10% relative to the status-quo methods and 34% in some cases. Therefore, I recommend that researchers pair units according to the baseline outcome if it is available.
Keywords: Matched-pair design, baseline outcome, stratified randomization, experiment, randomized controlled trial
JEL Classification: C12, C13, C14, C90
Suggested Citation: Suggested Citation