Department of Statistics
University of Wisconsin-Madison
1300 University Avenue
Madison, WI 53706
NBER Working Papers and Publications
|November 2019||The Surrogate Index: Combining Short-Term Proxies to Estimate Long-Term Treatment Effects More Rapidly and Precisely|
with Susan Athey, Raj Chetty, Guido W. Imbens: w26463
A common challenge in estimating the long-term impacts of treatments (e.g., job training programs) is that the outcomes of interest (e.g., lifetime earnings) are observed with a long delay. We address this problem by combining several short-term outcomes (e.g., short-run earnings) into a “surrogate index,” the predicted value of the long-term outcome given the short-term outcomes. We show that the average treatment effect on the surrogate index equals the treatment effect on the long-term outcome under the assumption that the long-term outcome is independent of the treatment conditional on the surrogate index. We then characterize the bias that arises from violations of this assumption, deriving feasible bounds on the degree of bias and providing simple methods to validate the key assumpti...