Searching for Rehabilitation in Nonparametric Regression Models with Exogenous Treatment Assignment

27 Pages Posted: 7 Oct 2012

See all articles by Daniel J. Henderson

Daniel J. Henderson

University of Alabama; Institute for the Study of Labor (IZA)

Esfandiar Maasoumi

Southern Methodist University (SMU) - Department of Economics

Abstract

This paper offers some new directions in the analysis of nonparamertric models with exogenous treatment assignment. The nonparametric approach opens the door to the examination of potentially different distributed outcomes. When combined with cross-validation, it also identifies potentially irrelevant variables and linear versus nonlinear effects. Examination of the distribution of effects requires distribution metrics, such as stochastic dominance tests for ranking based on a wide range of criterion functions, including dollar valuations. We can identify subgroups with different treatment outcomes. We offer an empirical demonstration based on the GAIN data. In the case of one covariate (English as the primary language), there is support for a statistical inference of uniform first order dominant treatment effects. We also find several others that indicate second and higher order dominance rankings to a statistical degree of confidence.

Keywords: bootstrap, GAIN, nonparametric, rehabilitation, stochastic dominance, treatment effects

JEL Classification: C14

Suggested Citation

Henderson, Daniel J. and Maasoumi, Esfandiar (Essie), Searching for Rehabilitation in Nonparametric Regression Models with Exogenous Treatment Assignment. IZA Discussion Paper No. 6874, Available at SSRN: https://ssrn.com/abstract=2158284 or http://dx.doi.org/10.2139/ssrn.2158284

Daniel J. Henderson (Contact Author)

University of Alabama ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-8991 (Phone)

HOME PAGE: http://cba.ua.edu/~djhender

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/index_html?lang=en&mainframe=http%3A//www.iza.org/en/webcontent/personnel/photos/

Esfandiar (Essie) Maasoumi

Southern Methodist University (SMU) - Department of Economics ( email )

Dallas, TX 75275
United States
(214) 768-4298 (Phone)
(214) 768-1821 (Fax)

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