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Bounding ATE with ITT

Discussion Papers

No.106

May 2007

ABSTRACT

We propose the bounds on ATE using intention-to-treat (ITT) estimator when there are compliers/noncompliers in randomized trials. The bounds are given as ITT≼ATE≼CACE, where compliers’ average treatment effect (CACE) can be computed from ITT and complier ratio. We show that these bounds can be derived from two assumptions: (1) average treatment effect is greater with compliers than noncompliers or CACE≽NACE, (2) noncompliers’ average treatment effect (NACE) is nonnegative. We give an example of poverty impacts of health insurance, and effects of adverse selection and moral hazard of health insurance.

Keywords: intention-to-treat (ITT) estimator, compliers’ average treatment effect (CACE) estimator, ATE estimator, bounds
JEL classification: C13, C93, D82, I11, O15

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