Figure 7:

Support for Selection-Correction Assumptions

Notes: Panel (a) plots $\frac{\text{StDev}\left({\eta }_{j(i),k}^{\mathit{\text{dest}}}\right)}{\text{StDev}\left(h_{j(i),k}^{\mathit{\text{dest}}}\right)}$ against $\frac{\text{StDev}\left({\eta }_{j(i)}^{\mathit{\text{orig}}},k\right)}{\text{StDev}\left(h_{j(i),k}^{\mathit{\text{orig}}}\right)}$ for 100 different subsets $H_i^k$; each point in the scatter plot represents a different definition of k. For each k, H_i includes log(overall utilization) and a random subset of 13 of the 27 chronic conditions. Panel (b) reports various summary statistics about the treatment effects $\left(L_j^{\ast }-\overline{L}\right)$ produced by each of the 100 different definitions of k in panel (a). The left figure in panel (b) plots the standard deviation across CZs of the treatment effects from each of these alternate specifications; the dotted line shows the standard deviation across CZs of the treatment effects in the baseline specification (Table 4). All standard deviations are computed using the split-sample approach. The right figure in panel (b) plots the correlation of the treatment effects in each of the alternate specifications with the baseline treatment effects.