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For Whom is the Treatment Effective? An Atheoretic Inductive Approach to Identifying Response Heterogeneity

Mark C Long

We propose a method for identifying the characteristics of individuals who have the highest and lowest responses to a treatment. Our approach is designed for situations where theory is lacking regarding the types of persons who should be most responsive to the treatment. Our method includes cross-validation and out-of-sample prediction. We apply this method to evaluate three programs: the Oregon Medicaid experiment, the Washington DC Opportunity Scholarship Program, and the national Head Start Impact Study. For each of these programs, we find significant response heterogeneity and are able to identify the characteristics of individuals who are most likely to be impacted. Our method is designed to be simple to use by researchers and practitioners and to yield predicted heterogeneity that can be used by program administrators to more efficiently allocate scarce access to programs.