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Journal of Economic Theory and Econometrics
Journal of the Korean Econometric Society
Basics and Recent Advances in Regression Discontinuity: Difference versus Regression Forms
Vol.32, No.3, September 2021, 1–68
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Jin-young Choi
(Xiamen University)
Myoung-jae Lee
(Korea University)
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Abstract
This paper reviews the basics of regression discontinuity (RD) design,
whose hallmark is having a treatment determined by an underlying score
(i.e., ‘running variable’) crossing a known cutoff or not. Following the basics,
recent advances in RD are examined, where the topics are grouped into those
related to score and those not. The former topics include multiple scores, measurement
errors in score, integer score, and score-density continuity. The latter
topics include regression kink (RK), high-order effects, and extending RD identification
range (i.e., external validity). Detailed empirical examples are provided
for the RD topics, but not for the RD basics which are fairly well-known
these days. RD is simple, which can thus appeal even to lay audiences, and this
review accordingly emphasizes the intuitive nature of RD and its applicability
in practice. Practical and widely applicable techniques are given more coverage,
whereas theoretically-motivated but less-practically-relevant ones are only
briefly mentioned. The beauty of RD is in its simplicity, and temptation to make
it too sophisticated should be resisted.
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Keywords
Regression Discontinuity, Score, Cutoff, Local Randomization, Instrument, Regression Kink, High-order Effects |
JEL classification codes
C24, C31, C33, C36 |
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