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TOPIC:
MONOTONICITY TEST FOR LOCAL AVERAGE TREATMENT EFFECTS UNDER REGRESSION DISCONTINUITY
ABSTRACT
Researchers are often interested in the relationship between treatment effects and observed individual heterogeneity. This paper proposes the first nonparametric monotonicity test under the popular regression discontinuity framework. The proposed test examines whether the average treatment effect or the local average treatment effect has a monotonic relationship with some of the observed individual characteristics. We show consistency and asymptotic uniform size control of the proposed test. We apply the test to study the heterogeneous effect of attending a more selective high school with respect to peer quality.
Keywords: Average treatment effect, Local average treatment effect, Regression discontinuity, Regression monotonicity