Hi all,
I have a question regarding the performance of a placebo test when using a regression discontinuity design.
With reference to Angrist and Pischke (2008) one can center the running variable around the cutoff to ensure that the treatment effect is still the coefficient to D_i. The true cutoff is at zero such that for the normal regression it is not necessary. However, when doing a placebo test it is. When performing a placebo test for a pseudo cutoff of +0.03 I conduct it as follows (Let's call the running variable x):
My question is what to do if I want to test for a pseudo cutoff of -0.03? Do I then specify it as follows:
Thank you!
Best, Kathrin
I have a question regarding the performance of a placebo test when using a regression discontinuity design.
With reference to Angrist and Pischke (2008) one can center the running variable around the cutoff to ensure that the treatment effect is still the coefficient to D_i. The true cutoff is at zero such that for the normal regression it is not necessary. However, when doing a placebo test it is. When performing a placebo test for a pseudo cutoff of +0.03 I conduct it as follows (Let's call the running variable x):
Code:
gen D = x > 0.03 gen xtilde = x-0.03 gen xtilde_2 = xtilde^2 gen xtilde_3 = xtilde^3 gen xtildeD = xtilde * D gen xtilde_2D = xtilde_2 * D gen xtilde_3D = xtilde_3 * D reg outcome D xtilde xtilde_2 xtilde_3 xtildeD xtilde_2D xtilde_3D, robust
Code:
gen D = x > -0.03 gen xtilde = x-(-0.03) gen xtilde_2 = xtilde^2 gen xtilde_3 = xtilde^3 gen xtildeD = xtilde * D gen xtilde_2D = xtilde_2 * D gen xtilde_3D = xtilde_3 * D reg outcome D xtilde xtilde_2 xtilde_3 xtildeD xtilde_2D xtilde_3D, robust
Best, Kathrin
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