Inference on breakdown frontiers

Abstract

Given a set of baseline assumptions, a breakdown frontier is the boundary between the set of assumptions which lead to a specific conclusion and those which do not. In a potential outcomes model with a binary treatment, we consider two conclusions: First, that ATE is at least a specific value (e.g., nonnegative) and second that the proportion of units who benefit from treatment is at least a specific value (e.g., at least 50%). For these conclusions, we derive the breakdown frontier for two kinds of assumptions: one which indexes relaxations of the baseline random assignment of treatment assumption, and one which indexes relaxations of the baseline rank invariance assumption. These classes of assumptions nest both the point identifying assumptions of random assignment and rank invariance and the opposite end of no constraints on treatment selection or the dependence structure between potential outcomes. This frontier provides a quantitative measure of the robustness of conclusions to relaxations of the baseline point identifying assumptions. We derive √ N-consistent sample analog estimators for these frontiers. We then provide two asymptotically valid bootstrap procedures for constructing lower uniform confidence bands for the breakdown frontier. As a measure of robustness, estimated breakdown frontiers and their corresponding confidence bands can be presented alongside traditional point estimates and confidence intervals obtained under point identifying assumptions. We illustrate this approach in an empirical application to the effect of child soldiering on wages. We find that sufficiently weak conclusions are robust to simultaneous failures of rank invariance and random assignment, while some stronger conclusions are fairly robust to failures of rank invariance but not necessarily to relaxations of random assignment.

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“…Here, ρ measures the degree of rank correlation: ρ = 1 corresponds to the rank-preserving case (the ranking is preserved across treatment states), whereas −1 < ρ < 1 allows for ranks to vary across treatment states (see, e.g., refs. ( 9 , 11 – 14 ) for pertinent discussions).…”

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“… Masten et al (Forthcoming) themselves build on a body of work inMasten and Poirier (2020),Masten and Poirier (2018), andHorowitz and Manski (1995); Appendix A ofMasten and Poirier (2020) provides a discussion of this literature.…”