A U-statistic-based test of treatment effect heterogeneity

Abstract

Many studies include a goal of determining whether there is treatment effect heterogeneity across different subpopulations. In this paper, we propose a U-statistic-based nonparametric test of the null hypothesis that the treatment effects are identical in different subgroups. The proposed test provides more power than the standard parametric test when the underlying distribution assumptions of the latter are violated. We apply the method to data from an economic study of programme effectiveness and find that there is treatment effect heterogeneity in different subpopulations.