A Toolkit for the Study of Treatment-Effect Discontinuities

This paper provides a toolkit for the study of distributional treatment effects (DTEs) focused on treatment-effect discontinuities defined as points where marginal distributional effects change sign.

Building on the Treatment Effects Curve (TEC, Verme, 2010), the paper makes three contributions.

First, we propose a methodological framework comprising a Horizontal Discontinuity Analysis (HDA) comparing groups in regions of opposite-signed effects using causal forests, and a Vertical Discontinuity Analysis (VDA) examining sign-switch points.

Second, we adapt crossing-point asymptotics to locate where a TEC crosses zero and to test the non-tangentiality of its local slope with a bias-corrected Wald statistic.

Third, we illustrate the full workflow on synthetic data and add a diagnostic application to Mexico's PROGRESA data.

The paper shows how these contributions complement and expand existing instruments for DTE analyses.