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Douglas A. Smith


The Collinearity Problem in Regression-Discontinuity Models


The article addresses the issue of collinearity in regression-discontinuity models, as raised by a recent book review in this Journal. It examines the causes of collinearity between the constant term in the model and a dichotomous explanatory variable that indicated participation in a program being evaluated. It shows that removal of the constant does not solve the collinearity problem but in fact may bias the estimated program impact. Collinearity can truly be overcome only by collecting more data (of an appropriate kind).


Measuring The Benefits Of Risk Reduction In Program Evaluations And Regulatory Impact Assessments


The risk of death is affected by a wide variety of public policies and regulations. This paper argues that societal willingness to pay for risk reduction should be used in a consistent manner when evaluating programs and regulations affecting the risk of death. We review the conceptual basis for using estimates of willingness to pay for risk reduction and provide new empirical estimates of these magnitudes based on Canadian data. The explicit and consistent measure that we propose can promote both efficiency and equity in the use of society's resources.