Regression Discontinuity - Institute for Policy Research

Benefits and Tradeoffs of Option 2
The main advantage is that at each pooling level the
homogeneity of treatment effects can be assessed by
comparing the pooled within-effect variance with the
corresponding between-effect variance obtained from the
estimated parameter covariance matrix of the three-level
model. If effects can be considered as homogeneous, pooling
is warranted, if not different treatment effects may be
reported.
Limitations:
• To get the estimated covariance matrices one must assume
that correlation structures of treatment effects are constant
across grades, cohort, and states.
– Or, one can use Hedges et al. robust standard errors method for
dealing with correlation between estimates.
• Reduced efficiency relative to option 1