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Regression Discontinuity - Institute for Policy Research

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IV Approach (1)<br />

Rather than exclude observations assigned to<br />

treatment by alternative mechanisms, delegate these<br />

cases as “fuzzy” units.<br />

First, designate a treatment assignment mechanism serves as the<br />

instrument <strong>for</strong> treatment receipt.<br />

Second, estimate the local average treatment effect, which is the<br />

difference in conditional mean outcomes <strong>for</strong> treatment and<br />

comparison groups divided by the difference in treatment receipt<br />

rates <strong>for</strong> both groups within a neighborhood around the cutoff.

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