Difference-in-discontinuities: theory and applications

Abstract

his project sets out to explore the econometric theory behind the newly developed difference-in-discontinuities design. Despite its increasing use in causal inference research, there are currently limited studies about its underlying principles and properties. The method combines elements of regression discontinuity and difference-in-differences, allowing researchers to eliminate the effects of potential threshold discontinuities and account for changes in the larger environment. The project will work on formalizing the difference-in-discontinuity theory, including identification assumptions, a nonparametric unbiased estimator, and its asymptotic distribution. We aim to use Monte Carlo simulations to demonstrate the small sample properties and validate the asymptotic characteristics derived. (AU)