Balancing tests in stratified randomized controlled trials: A cautionary note

Sergio Firpo, Miguel N. Foguel, Hugo Jales

Research output: Contribution to journalArticle

Abstract

We study the properties of imbalances tests of predetermined characteristics (covariates) in stratified randomized controlled trials. When the parameter of interest is a weighted average of the causal effects at all strata, then a test statistic based on a fixed effects regression model may suffice to detect the relevant imbalances. This will be true under a condition on the partial correlation between covariates and the outcome variable (uniformity condition). If that condition is violated, then the test based on the fixed effects regression will lack power. In that case, a test based on the fully saturated regression model can overcome this problem. Finally, we provide an omnibus test for the relevance of controlling for the covariates when estimating the average treatment effect (ATE).

Original languageEnglish (US)
Article number108771
JournalEconomics Letters
Volume186
DOIs
StatePublished - Jan 2020

Keywords

  • Balancing tests
  • Randomized controlled trial
  • Stratification

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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