The event study model is a powerful econometric tool used for the purpose of estimating dynamic treatment effects. One of its most appealing features is that it provides a built-in graphical summary ...of results, which can reveal rich patterns of behavior. Another value of the picture is the estimated pre-event pseudo-"effects", which provide a type of placebo test. In this essay I aim to provide a framework for a shared understanding of these models. There are several (sometimes subtle) decisions and choices faced by users of these models, and I offer guidance for these decisions.
We consider statistical inference for regression when data are grouped into clusters, with regression model errors independent across clusters but correlated within clusters. Examples include data on ...individuals with clustering on village or region or other category such as industry, and state-year differences-in-differences studies with clustering on state. In such settings, default standard errors can greatly overstate estimator precision. Instead, if the number of clusters is large, statistical inference after OLS should be based on cluster-robust standard errors. We outline the basic method as well as many complications that can arise in practice. These include cluster-specific fixed effects, few clusters, multiway clustering, and estimators other than OLS.
Who suffers during recessions? Hoynes, Hilary Williamson; Miller, Douglas Lee; Schaller, Jessamyn
The Journal of economic perspectives,
07/2012, Letnik:
26, Številka:
3
Journal Article
Recenzirano
Odprti dostop
In this paper, we examine how business cycles affect labor market outcomes in the United States. We conduct a detailed analysis of how cycles affect outcomes differentially across persons of ...differing age, education, race, and gender, and we compare the cyclical sensitivity during the Great Recession to that in the early 1980s recession. We present raw tabulations and estimate a state panel data model that leverages variation across U.S. states in the timing and severity of business cycles. We find that the impacts of the Great Recession are not uniform across demographic groups and have been felt most strongly for men, black and Hispanic workers, youth, and low-education workers. These dramatic differences in the cyclicality across demographic groups are remarkably stable across three decades of time and throughout recessionary periods and expansionary periods. For the 2007 recession, these differences are largely explained by differences in exposure to cycles across industry-occupation employment. PUBLICATION ABSTRACT
This paper exploits a new source of variation in Head Start funding to identify the program's effects on health and schooling. In 1965 the Office of Economic Opportunity (OEO) provided technical ...assistance to the 300 poorest counties to develop Head Start proposals. The result was a large and lasting discontinuity in Head Start funding rates at the OEO cutoff for grant-writing assistance. We find evidence of a large drop at the OEO cutoff in mortality rates for children from causes that could be affected by Head Start, as well as suggestive evidence for a positive effect on educational attainment.
Robust Inference With Multiway Clustering Cameron, A. Colin; Gelbach, Jonah B.; Miller, Douglas L.
Journal of business & economic statistics,
04/2011, Letnik:
29, Številka:
2
Journal Article
Recenzirano
Odprti dostop
In this article we propose a variance estimator for the OLS estimator as well as for nonlinear estimators such as logit, probit, and GMM. This variance estimator enables cluster-robust inference when ...there is two-way or multiway clustering that is nonnested. The variance estimator extends the standard cluster-robust variance estimator or sandwich estimator for one-way clustering (e.g., Liang and Zeger 1986; Arellano 1987) and relies on similar relatively weak distributional assumptions. Our method is easily implemented in statistical packages, such as Stata and SAS, that already offer cluster-robust standard errors when there is one-way clustering. The method is demonstrated by a Monte Carlo analysis for a two-way random effects model; a Monte Carlo analysis of a placebo law that extends the state-year effects example of Bertrand, Duflo, and Mullainathan (2004) to two dimensions; and by application to studies in the empirical literature where two-way clustering is present.
Researchers have increasingly realized the need to account for within-group dependence in estimating standard errors of regression parameter estimates. The usual solution is to calculate ...cluster-robust standard errors that permit heteroskedasticity and within-cluster error correlation, but presume that the number of clusters is large. Standard asymptotic tests can over-reject, however, with few (five to thirty) clusters. We investigate inference using cluster bootstrap-t procedures that provide asymptotic refinement. These procedures are evaluated using Monte Carlos, including the example of Bertrand, Duflo, and Mullainathan (2004). Rejection rates of 10% using standard methods can be reduced to the nominal size of 5% using our methods.
This paper uses quasi-experimental variation from federal tax reform to evaluate the effect of the EITC on infant health outcomes. We find that the EITC reduces the incidence of low birth weight and ...increases mean birth weight: a $1,000 treatment-on-the-treated leads to a 2 to 3 percent decline in low birth weight. Our results suggest that the candidate mechanisms include more prenatal care and less negative health behaviors (smoking). Additionally, we find a shift from public to private insurance coverage, and for some a reduction in insurance overall, indicating a potential change in the quality and perhaps quantity of coverage.
Why Are Recessions Good for Your Health? Miller, Douglas L.; Page, Marianne E.; Stevens, Ann Huff ...
The American economic review,
05/2009, Letnik:
99, Številka:
2
Journal Article
Recenzirano
The purpose of this study is to advance the understanding of the mechanisms that are most likely to contribute to the procyclical relationship between macroeconomic conditions and mortality rates. In ...particular, it aims to distinguish between health changes resulting from changes in an individual's own work and health behaviors and health changes that are related to "externalities" associated with the business cycle. While some of these possibilities have been explored in earlier work, this study brings additional light to bear on the question by focusing on more detailed mortality rate decompositions by age, sex, race, and cause of death, and by investigating the relationship between a particular demographic group's mortality and the unemployment rate of that group relative to the unemployment rates of other demographic groups.
It is well-known that mortality rates are pro-cyclical. In this paper, we attempt to understand why. We find little evidence that cyclical changes in individuals' own employment-related behavior ...drives the relationship; own-group employment rates are not systematically related to own-group mortality. Further, most additional deaths that occur when the economy is strong are among the elderly, particularly elderly women and those residing in nursing homes. We also demonstrate that staffing in nursing homes moves countercyclically. These findings suggest that cyclical fluctuations in the quality of health care may be a critical contributor to cyclical movements in mortality.
PDF
