Accounting for Unobservable Heterogeneity in Cross Section Using Spatial First Differences

@article{Druckenmiller2018AccountingFU,
  title={Accounting for Unobservable Heterogeneity in Cross Section Using Spatial First Differences},
  author={Hannah Druckenmiller and Solomon Hsiang},
  journal={NBER Working Paper Series},
  year={2018}
}
  • Hannah Druckenmiller, Solomon Hsiang
  • Published 2018
  • Computer Science, Economics, Mathematics
  • NBER Working Paper Series
  • We develop a simple cross-sectional research design to identify causal effects that is robust to unobservable heterogeneity. When many observational units are dense in physical space, it may be sufficient to regress the “spatial first differences�? (SFD) of the outcome on the treatment and omit all covariates. This approach is conceptually similar to first differencing approaches in time-series or panel models, except the index for time is replaced with an index for locations in space. The SFD… CONTINUE READING