Yuehao Bai is an econometrician in the Department of Economics at the University of Michigan. His recent research concerns the design and analysis of experiments as well as inference under partial identification. His papers have been published in the American Economic Review, Journal of the American Statistical Association, Journal of Econometrics, and Journal of Business and Economic Statistics.

Title: Optimality of Matched-Pair Designs in Randomized Controlled Trials

Abstract: In randomized controlled trials (RCTs), treatment is often assigned by stratified randomization. I show that among all stratified randomization schemes which treat all units with probability one half, a certain matched-pair design achieves the maximum statistical precision for estimating the average treatment effect (ATE). In an important special case, the optimal design pairs units according to the baseline outcome. In a simulation study based on datasets from 10 RCTs, this design lowers the standard error for the estimator of the ATE by 10% on average, and by up to 34%, relative to the original designs.