Identification of Long-Term Treatment Effects via Temporal Links, Observational, and Experimental Data

Author: Filip Obradović

Abstract: Recent literature proposes combining short-term experimental and long-term observational data to provide credible alternatives to conventional observational studies for identification of long-term average treatment effects (LTEs). I show that experimental data have an auxiliary role in this context. They bring no identifying power without additional modeling assumptions. When modeling assumptions are imposed, experimental data serve to amplify their identifying power. If the assumptions fail, adding experimental data may only yield results that are farther from the truth. Motivated by this, I introduce two assumptions on treatment response that may be defensible based on economic theory or intuition. To utilize them, I develop a novel two-step identification approach that centers on bounding temporal link functions – the relationship between short-term and mean long-term potential outcomes. The approach provides sharp bounds on LTEs for a general class of assumptions, and allows for imperfect experimental compliance – extending existing results.