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Bounds on treatment effects on transitions

Authors: Johan Vikström , Geert Ridder and Martin Weidner
Date: 09 January 2015
Type: cemmap Working Paper, CWP01/15
DOI: 10.1920/wp.cem.2015.0115

Abstract

This paper considers identification of treatment effects on conditional transition probabilities. We show that even under random assignment only the instantaneous average treatment effect is point identified. Because treated and control units drop out at different rates, randomization only ensures the comparability of treatment and controls at the time of randomization, so that long run average treatment effects are not point identified. Instead we derive informative bounds on these average treatment effects. Our bounds do not impose (semi)parametric restrictions, as e.g. proportional hazards. We also explore various assumptions such as monotone treatment response, common shocks and positively correlated outcomes.

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Johan Vikström, Geert Ridder and Martin Weidner April 2016, Bounds On Treatment Effects On Transitions, cemmap Working Paper, CWP17/16, IFS

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