Regression discontinuity design

But in many policy settings, treatment is determined by a strict deterministic cutoff.

The text dedicates chapter twenty to this exact scenario, regression discontinuity.

Let's paint the picture.

Imagine a university scholarship that is automatically awarded to any student who scores an eighty or above on a standardized test.

Yes.

We look at the forcing variable, the test score, and we zoom in microscopically on the threshold.

The fundamental assumption of regression discontinuity is that potential outcomes are continuous at the cutoff.

We assume that the student who scored a seventy-nine point nine and the student who scored an eighty point one are, on average, identical in their unmeasured traits, their motivation, and their background.