Equivalence Testing for Regression Discontinuity Designs

Abstract: Regression discontinuity (RD) designs are increasingly common in political science. They have many advantages, including a known and observable treatment assignment mechanism. The literature has emphasized the need for “falsification tests” and ways to assess the validity of the design. When implementing RD designs, researchers typically rely on two falsification tests, based on empirically testable implications of the identifying assumptions, to argue the design is credible. These tests, one for continuity in the regression function for a pretreatment covariate, and one for continuity in the density of the forcing variable, use a null of no difference in the parameter of interest at the discontinuity. Common practice can, incorrectly, conflate a failure to reject evidence of a flawed design with evidence that the design is credible. The well-known equivalence testing approach addresses these problems, but how to implement equivalence tests in the RD framework is not straightforward. This paper develops two equivalence tests tailored for RD designs that allow researchers to provide statistical evidence that the design is credible. Simulation studies show the superior performance of equivalence-based tests over tests-of-difference, as used in current practice. The tests are applied to the close elections RD data presented in Eggers et al. (2015b).

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License CC BY
DOI https://doi.org/10.1017/pan.2020.43
Type Journal Articles
C-ID POLS 160 - Methods
Pedagogical Note Not Yet

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