Economics Working Papers

Publication Date

8-2016

Number

16001

Abstract

Regression Discontinuity designs have become popular in empirical studies due to their attractive properties for estimating causal effects under transparent assumptions. Nonetheless, most popular procedures assume i.i.d. data, which is unreasonable in many common applications. To fill this gap, we derive the properties of traditional local polynomial estimators in a fixed-G setting that allows for cluster dependence in the error term. Simulation results demonstrate that accounting for clustering in the data while selecting bandwidths may lead to lower MSE while maintaining proper coverage. We then apply our cluster-robust procedure to an application examining the impact of Low-Income Housing Tax Credits on neighborhood characteristics and low-income housing supply.

JEL Classification

C13, C14, C21

Publication Status

Version 1: April 2016, Revision: August 2016

File Format

application/pdf

Length

33 pages

Included in

Econometrics Commons

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