NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A Note on Variance Estimation for the Oaxaca Estimator of Average Treatment Effects

Patrick M. Kline

NBER Working Paper No. 19784
Issued in January 2014
NBER Program(s):   LS   TWP

We derive the limiting distribution of the Oaxaca estimator of average treatment effects studied by Kline (2011). A consistent estimator of the asymptotic variance is proposed that makes use of standard regression routines. It is shown that ignoring uncertainty in group means will tend to lead to an overstatement of the asymptotic standard errors. Monte Carlo experiments examine the finite sample performance of competing approaches to inference.

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Published: Kline, Patrick, 2014. "A note on variance estimation for the Oaxaca estimator of average treatment effects," Economics Letters, Elsevier, vol. 122(3), pages 428-431.

 
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