Which of the following is the reason polynomial RD models can be dangerous to use?
A) There is no danger in using a polynomial model instead of a varying slopes model.
B) Polynomial models are sensitive and can produce bumps at the cutoff that are larger than they should be.
C) Polynomial models lead to further endogeneity when the error term is not continuous.
D) Polynomial models can produce multicollinearity.

Question

Quizplus · Accepted Answer

Polynomial models can be dangerous to use because they can produce bumps at the cutoff that are larger than they should be, leading to potentially misleading results. This occurs because polynomial models are sensitive to the choice of polynomial degree and can fit the data too well, including noise, which can create false patterns. Therefore, it is important to consider other modeling options, such as varying slopes models, to avoid this issue. The other choices are not accurate reasons for why polynomial RD models are dangerous to use.

Which of the Following Is the Reason Polynomial RD Models