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Nonparametric Tests for Treatment Effect Heterogeneity

45 Pages Posted: 29 Jun 2006  

Richard K. Crump

Federal Reserve Banks - Federal Reserve Bank of New York

V. Joseph Hotz

Duke University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Guido W. Imbens

Stanford Graduate School of Business

Oscar A. Mitnik

Inter-American Development Bank; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2006

Abstract

A large part of the recent literature on program evaluation has focused on estimation of the average effect of the treatment under assumptions of unconfoundedness or ignorability following the seminal work by Rubin (1974) and Rosenbaum and Rubin (1983). In many cases however, researchers are interested in the effects of programs beyond estimates of the overall average or the average for the subpopulation of treated individuals. It may be of substantive interest to investigate whether there is any subpopulation for which a program or treatment has a nonzero average effect, or whether there is heterogeneity in the effect of the treatment. The hypothesis that the average effect of the treatment is zero for all subpopulations is also important for researchers interested in assessing assumptions concerning the selection mechanism. In this paper we develop two nonparametric tests. The first test is for the null hypothesis that the treatment has a zero average effect for any subpopulation defined by covariates. The second test is for the null hypothesis that the average effect conditional on the covariates is identical for all subpopulations, in other words, that there is no heterogeneity in average treatment effects by covariates. Sacrificing some generality by focusing on these two specific null hypotheses we derive tests that are straightforward to implement.

Suggested Citation

Crump, Richard K. and Hotz, V. Joseph and Imbens, Guido W. and Mitnik, Oscar A., Nonparametric Tests for Treatment Effect Heterogeneity (June 2006). NBER Working Paper No. t0324. Available at SSRN: https://ssrn.com/abstract=912425

Richard K. Crump

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

V. Joseph Hotz (Contact Author)

Duke University ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708
United States
919-660-1841 (Phone)
919-684-8974 (Fax)

HOME PAGE: http://www.econ.duke.edu/~vjh3

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics ( email )

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

Guido W. Imbens

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Oscar A. Mitnik

Inter-American Development Bank ( email )

1300 New York Ave, NW
Washington, DC 20577
United States

IZA Institute of Labor Economics

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

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