A közgazdaságtudományi közélet megújulásáért

Mate Kormos, Robert P. Lieli, Martin Huber

MKE-WP-39086

We study causal inference in randomized experiments (or quasi-experiments) following a
2 x 2 factorial design. There are two treatments, denoted A and B, and units are randomly
assigned to one of four categories: treatment A alone, treatment B alone, joint treatment, or
none. Allowing for endogenous non-compliance with the two binary instruments representing
the intended assignment, as well as unrestricted interference across the two treatments, we
derive the causal interpretation of various instrumental variable estimands under more general
compliance conditions than in the literature. In general, if treatment takeup is driven by
both instruments for some units, it becomes difficult to separate treatment interaction from
treatment effect heterogeneity. We provide auxiliary conditions and various bounding strategies
that may help zero in on causally interesting parameters. As an empirical illustration, we
apply our results to a program randomly offering two different treatments, namely tutoring
and financial incentives, to first year college students, in order to assess the treatments' effects
on academic performance.

Keywords: causal inference, interaction, instrumental variables, non-compliance
JEL codes: C22, C26, C90