Clustered Local Average Treatment Effects: Fields of Study and Academic Student Progress

84 Pages Posted: 19 May 2022

See all articles by Didier Nibbering

Didier Nibbering

Monash University - Department of Econometrics and Business Statistics

Matthijs Oosterveen

University of Lisbon - ISEG School of Economics and Management

Pedro Luis Silva

University of Porto - CIPES; Universidade do Porto - Faculdade de Economia (FEP)

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Abstract

Multiple unordered treatments with a binary instrument for each treatment are common in policy evaluation. This multiple treatment setting allows for different types of changes in treatment status that are non-compliant with the activated instrument. Therefore, instrumental variable (IV) methods have to rely on strong assumptions on the subjects' behavior to identify local average treatment effects (LATEs). This paper introduces a new IV strategy that identifies an interpretable weighted average of LATEs under relaxed assumptions, in the presence of clusters with similar treatments. The clustered LATEs allow for shifts across treatment clusters that are consistent with preference updating, but render IV estimation of individual LATEs biased. The clustered LATEs are estimated by standard IV methods, and we provide an algorithm that estimates the treatment clusters. We empirically analyze the effect of fields of study on academic student progress, and find violations of the LATE assumptions in line with preference updating, clusters with similar fields, treatment effect heterogeneity across students, and significant differences in student progress due to fields of study.

Keywords: treatment clusters, instrumental variables, multiple treatments, field of study

JEL Classification: C36, I21, I23

Suggested Citation

Nibbering, Didier and Oosterveen, Matthijs and Silva, Pedro Luis, Clustered Local Average Treatment Effects: Fields of Study and Academic Student Progress. IZA Discussion Paper No. 15159, Available at SSRN: https://ssrn.com/abstract=4114718 or http://dx.doi.org/10.2139/ssrn.4114718

Didier Nibbering (Contact Author)

Monash University - Department of Econometrics and Business Statistics ( email )

900 Dandenong Road
Caulfield East, 3145
Australia

Matthijs Oosterveen

University of Lisbon - ISEG School of Economics and Management ( email )

Rua do Quelhas 6
Lisboa, 1200-781
Portugal

HOME PAGE: http://sites.google.com/view/matthijsoosterveen

Pedro Luis Silva

University of Porto - CIPES ( email )

Portugal

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

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