I'm planning on using a regression discontinuity design (RDD) to estimate the impact of a sector-specific law on the firms in that sector. I need to create a control group and I have read somewhere in the literature that you should use "a similar sector". When it comes down the selecting the similar sector, I don't know where to start. Does anyone have any suggestion (readings and such)? The sectors which would be (separately) analysed are: telecommunication, education, construction, banking, finance.

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    $\begingroup$ How & why did you pick this analytic technique if you didn't know how to implement it? Why are you trying to do an analysis without the appropriate background and training? This looks like it would need a large amount of work, and far more information than you're providing, to give a useful answer. $\endgroup$ – 410 gone Apr 18 '18 at 13:33
  • $\begingroup$ i) I know how to implement it. ii) I don't see how this follows from the info provided. iii) The only answer that was given, by @LimonadaPT , has been useful. Thank you for your time. $\endgroup$ – Fabio I. Apr 19 '18 at 11:03

Ideally, but not always feasible, the first option would be to select a similar region where the law is not in place and compare them (e.g. different country / State / city)

If it is not possible to compare with another region, then chose a similar industry. I would try to justify it well though, and comparability would be harder to prove. For example, if you want to study subsidised education, you might want to compare it with subsidized healthcare - the argument could be they're both services, and provide basic needs at some point, with standardised outcomes expected.

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  • $\begingroup$ Unfortunately there is no spatial discontinuity here. I will try to think about that, but I was wondering if there was any existing literature that could help. $\endgroup$ – Fabio I. Jan 18 '18 at 11:41

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