Models of treatment effects when responses are heterogeneous.

Abstract

Heckman and Vytlacil (1) synthesize and extend a recent body of research in economics and statistics on the identification and estimation of treatment effects when the subjects have heterogeneous responses. This research has demonstrated the importance of distinguishing between several different types of treatment effects and the need to establish firmly the relationship between the different types. Heckman and Vytlacil (H&V) distinguish between four different types: average treatment effects (ATE), effects of the treatment on the treated (TT), local average treatment effects (LATE), and local instrumental variable (LIV) treatment effects. Each is conceptually different, and each has a different set of conditions for identification. The research discussed by H&V represents a genuine advance and clarification of concepts in models of treatment effects.