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01-Dataset-Creation.do text/x-stata-syntax 11.8 KB 09/30/2019 11:47:AM
02-Analysis.do text/x-stata-syntax 6.9 KB 09/30/2019 11:50:AM
03-Mathematica-Supplement.nb text/plain 44.6 KB 09/30/2019 11:39:AM
ElwertPfeffer2019.pdf application/pdf 835.7 KB 09/14/2019 06:03:PM
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Project Citation: 

Elwert, Felix, and Pfeffer, Fabian. The Future Strikes Back. Using Future Treatments to Detect and Reduce Hidden Bias. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-09-30. https://doi.org/10.3886/E104060V2

Persistent URL:  http://doi.org/10.3886/E104060V2

Project Description

Summary:  View help for Summary
Conventional advice discourages controlling for post-outcome variables in regression analysis. By contrast, we show that controlling for commonly available post-outcome (i.e. future) values of the treatment variable can help detect, reduce, and even remove omitted variable bias (unobserved confounding). The premise is that the same unobserved confounder that affects treatment also affects the future value of the treatment. Future treatments thus proxy for the unmeasured confounder, and researchers can exploit these proxy measures productively. We establish several new results: Regarding a commonly assumed data-generating process involving future treatments, we (1) introduce a simple new approach and show that it strictly reduces bias; (2) elaborate on existing approaches and show that they can increase bias; (3) assess the relative merits of alternative approaches; (4) analyze true state dependence and selection as key challenges. (5) Importantly, we also introduce a new non-parametric test that uses future treatments to detect hidden bias even when future-treatment estimation fails to reduce bias. We illustrate these results empirically with an analysis of the effect of parental income on children’s educational attainment.

Scope of Project

Subject Terms:  View help for Subject Terms PSID
Geographic Coverage:  View help for Geographic Coverage United States
Time Period(s):  View help for Time Period(s) 1968 – 1992


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