Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: November, 25th
Room : 3001

Pedro VERGARA MERINO “Waiting for Balance: Covariate-Adaptive Randomization in Sequential Experiments”

Abstract :

When assigning units to treatment and control, researchers are often confronted with the sequential arrival of participants over time (e.g., job seekers, patients). The challenge in such settings is to assign participants sequentially while maintaining covariate balance between treatment arms. This paper introduces the sequential cube method (SCM), a new design that achieves near-exact balance in covariate moments at the cost of only a short waiting period before treatment assignment. I first show that exact balance, for a given function of covariates, delivers the optimal precision of treatment effect estimators. Under general conditions, I prove that SCM attains near-exact balance. Moreover, I establish that the expected waiting time under SCM grows only in proportion to the number of covariates used for balancing, making the procedure scalable in practice. I further derive the asymptotic normality of average treatment effect estimators under SCM, ensuring valid inference. Simulation studies and empirical applications highlight the practical advantages of SCM. Relative to alternative balancing designs, SCM (i) improves covariate balance, (ii) increases the precision of treatment effect estimators, and (iii) requires substantially shorter waiting times.

Organizers:
Benoît SCHMUTZ (Pôle économie du CREST)
Clément MALGOUYRES (Pôle économie du CREST)

Sponsors:
CREST