Despite the absence of an [[experimental design]], an RDD can exploit [[exogenous]] characteristics of the intervention to elicit [[causality|causal effects]]. If all students above a given grade — for example 80% — are given the scholarship, it is possible to elicit the local treatment effect by comparing students around the 80% cut-off. The intuition here is that a student scoring 79% is likely to be very similar to a student scoring 81% — given the pre-defined threshold of 80%. However, one student will receive the scholarship while the other will not. Comparing the outcome of the awardee (treatment group) to the [[Counterfactual conditional|counterfactual]] outcome of the non-recipient (control group) will hence deliver the local treatment effect. | Despite the absence of an [[experimental design]], an RDD can exploit [[exogenous]] characteristics of the intervention to elicit [[causality|causal effects]]. If all students above a given grade — for example 80% — are given the scholarship, it is possible to elicit the local treatment effect by comparing students around the 80% cut-off. The intuition here is that a student scoring 79% is likely to be very similar to a student scoring 81% — given the pre-defined threshold of 80%. However, one student will receive the scholarship while the other will not. Comparing the outcome of the awardee (treatment group) to the [[Counterfactual conditional|counterfactual]] outcome of the non-recipient (control group) will hence deliver the local treatment effect. |