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Bounding a linear causal effect using relative correlation restrictions

Brian Krauth

Discussion Papers from Department of Economics, Simon Fraser University

Abstract: This paper describes and implements a simple approach to the most common problem in applied microeconometrics: estimating a linear causal effct when the explanatory variable of interest might be correlated with relevant unobserved variables. The main idea is to place restrictions on the correlation between the variable of interest and relevant unobserved variables relative to the correlation between the variable of interest and observed control variables. These relative correlation restrictions allow a researcher to construct informative bounds on parameter estimates, and to assess the sensitivity of conventional estimates to plausible deviations from the identifying assumptions. The estimation method and its properties are described, and two empirical applications are demonstrated.

Keywords: sensitivity analysis; partial identification; endogeneity (search for similar items in EconPapers)
JEL-codes: C1 C21 (search for similar items in EconPapers)
Pages: 43
Date: 2011-08
New Economics Papers: this item is included in nep-ecm
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Citations: View citations in EconPapers (6)

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Journal Article: Bounding a Linear Causal Effect Using Relative Correlation Restrictions (2016) Downloads
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