Treatment interactions with nonexperimental data in Stata
Graham K. Brown
Centre for Development Studies
University of Bath
Bath, UK
[email protected]
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Thanos Mergoupis
Department of Economics
University of Bath
Bath, UK
[email protected]
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Abstract. Treatment effects may vary with the observed characteristics of the
treated, often with important implications. In the context of experimental data, a
growing literature deals with the problem of specifying treatment interaction terms
that most effectively capture this variation. Some results of this literature are now
implemented in Stata. With nonexperimental (observational) data, and in particular
when selection into treatment depends on unmeasured factors, treatment
effects can be estimated using Stata’s treatreg command. Though not originally
designed for this purpose, treatreg can be used to consistently estimate treatment
interaction parameters. With interactions, however, adjustments are required to
generate predicted values and estimate the average treatment effect. In this article,
we introduce commands that perform this adjustment for multiplicative interactions,
and we show the required adjustment for more complicated interactions.
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Graham K. Brown, Thanos Mergoupis
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itreatreg, treatment-effects models, interaction terms
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