Identification of a Triangular Two Equation System Without Instruments

Arthur Lewbel, Susanne Schennach and Linqi Zhang
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Linqi Zhang: Boston College

No 1022, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We show that a standard linear triangular two equation system can be point identified, without the use of instruments or any other side information. We find that the only case where the model is not point identified is when a latent variable that causes endogeneity is normally distributed. In this non-identified case, we derive the sharp identified set. We apply our results to Acemoglu and Johnson’s (2007) model of life expectancy and GDP, obtaining point identification and comparable estimates to theirs, without using their (or any other) instrument.

Keywords: Returns to schooling; identification; triangular system; Kotlarski; deconvolution (search for similar items in EconPapers)
JEL-codes: C14 C30 (search for similar items in EconPapers)
Date: 2020-12-20, Revised 2022-12-15
New Economics Papers: this item is included in nep-ecm and nep-ore
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Identification of a Triangular Two Equation System Without Instruments (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:1022

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