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What Do Instrumental Variable Models Deliver with Discrete Dependent Variables?

Andrew Chesher and Adam Rosen

American Economic Review, 2013, vol. 103, issue 3, 557-62

Abstract: We compare nonparametric instrumental variables (IV) models with linear models and 2SLS methods when dependent variables are discrete. A 2SLS method can deliver a consistent estimator of a Local Average Treatment Effect but is not informative about other treatment effect parameters. The IV models set identify a range of interesting structural and treatment effect parameters. We give set identification results for a counterfactual probability and an Average Treatment Effect in a IV binary threshold crossing model. We illustrate using data on female employment and family size (employed by Joshua Angrist and William Evans (1998)) and compare with their LATE estimates.

JEL-codes: C26 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.3.557
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Citations: View citations in EconPapers (17)

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Working Paper: What do instrumental variable models deliver with discrete dependent variables? (2013) Downloads
Working Paper: What do instrumental variable models deliver with discrete dependent variables? (2013) Downloads
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