Geographic Difference-in-Discontinuities

TL;DR

This paper extends the difference-in-discontinuities framework to geographic settings, addressing challenges of multiple treatments and sorting at administrative borders to improve causal inference.

Contribution

It formalizes identifying assumptions for geographic difference-in-discontinuities, enabling removal of time-invariant sorting and compound treatments.

Findings

Formalized assumptions for geographic RD analysis

Extended difference-in-discontinuities to geographic settings

Addresses multiple treatments and sorting issues

Abstract

A recent econometric literature has critiqued the use of regression discontinuities where administrative borders serves as the 'cutoff'. Identification in this context is difficult since multiple treatments can change at the cutoff and individuals can easily sort on either side of the border. This note extends the difference-in-discontinuities framework discussed in Grembi et. al. (2016) to a geographic setting. The paper formalizes the identifying assumptions in this context which will allow for the removal of time-invariant sorting and compound-treatments similar to the difference-in-differences methodology.