CFDP 1927R2

Inference on Optimal Treatment Assignments

Author(s): 

Publication Date: November 2013

Revision Date: April 2015

Pages: 45

Abstract: 

We consider inference on optimal treatment assignments. Our methods allow for inference on the treatment assignment rule that would be optimal given knowledge of the population treatment effect in a general setting. The procedure uses multiple hypothesis testing methods to determine a subset of the population for which assignment to treatment can be determined to be optimal after conditioning on all available information, with a prespecified level of confidence. A Monte Carlo study confirms that the inference procedure has good small sample behavior. We apply the method to study Project STAR and the optimal assignment of small class based on school and teacher characteristics.

Keywords: 

Treatment assignment, Multiple testing

JEL Classification Codes:  C10, C18