Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments

Joshua Angrist and Alan Krueger

Journal of Economic Perspectives, 2001, vol. 15, issue 4, 69-85

Abstract: Instrumental variables was first used in the 1920s to estimate supply and demand elasticities and later to correct for measurement error in single equation models. Recently, instrumental variables have been widely used to reduce bias from omitted variables in estimates of causal relationships. Intuitively, instrumental variables methods use only a portion of the variability in key variables to estimate the relationships of interest; if the instruments are valid, that portion is unrelated to the omitted variables. We discuss the mechanics of instrumental variables and the qualities that make for a good instrument, devoting particular attention to instruments derived from "natural experiments."

JEL-codes: C30 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/jep.15.4.69
References: Add references at CitEc
Citations: View citations in EconPapers (1012)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jep.15.4.69 (application/pdf)

Related works:
Working Paper: Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments (2001)
Working Paper: Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:15:y:2001:i:4:p:69-85

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

Journal of Economic Perspectives is currently edited by Enrico Moretti

More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().