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Bounds On Treatment Effects On Transitions

Authors: Johan Vikström , Geert Ridder and Martin Weidner
Date: 22 April 2016
Type: cemmap Working Paper, CWP17/16
DOI: 10.1920/wp.cem.2016.1716


This paper considers identif cation of treatment effects on conditional transition probabilities. We show that even under random assignment only the instantaneous average treatment effect is point identi fied. Because treated and control units drop out at diff erent 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 identifi ed. 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 hat tighten the bounds.

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Previous version:
Johan Vikström, Geert Ridder and Martin Weidner January 2015, Bounds on treatment effects on transitions, cemmap Working Paper, CWP01/15, IFS

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