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Identification and Estimation Using a Density Discontinuity Approach

aSyracuse University, Syracuse, NY, USA
bUniversity of Tsukuba, Tsukuba, Ibaraki, Japan

Regression Discontinuity Designs

ISBN: 978-1-78714-390-6, eISBN: 978-1-78714-389-0

ISSN: 0731-9053

Publication date: 13 May 2017

Abstract

This chapter reviews recent developments in the density discontinuity approach. It is well known that agents having perfect control of the forcing variable will invalidate the popular regression discontinuity designs (RDDs). To detect the manipulation of the forcing variable, McCrary (2008) developed a test based on the discontinuity in the density around the threshold. Recent papers have noted that the sorting patterns around the threshold are often either the researcher’s object of interest or may relate to structural parameters such as tax elasticities through known functions. This, in turn, implies that the behavior of the distribution around the threshold is not only informative of the validity of a standard RDD; it can also be used to recover policy-relevant parameters and perform counterfactual exercises.

Keywords

Citation

Jales, H. and Yu, Z. (2017), "Identification and Estimation Using a Density Discontinuity Approach", Regression Discontinuity Designs (Advances in Econometrics, Vol. 38), Emerald Publishing Limited, Bingley, pp. 29-72. https://doi.org/10.1108/S0731-905320170000038003

Publisher

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Emerald Publishing Limited

Copyright © 2017 Emerald Publishing Limited