Exogenous Treatment and Endogenous Factors: Vanishing of Omitted Variable Bias on the Interaction Term

Olena Nizalova and Irina Murtazashvili

Journal of Econometric Methods, 2016, vol. 5, issue 1, 71-77

Abstract: Whether interested in the differential impact of a particular factor in various institutional settings or in the heterogeneous effect of policy or random experiment, the empirical researcher confronts a problem if the factor of interest is correlated with an omitted variable. This paper presents the circumstances under which it is possible to arrive at a consistent estimate of the mentioned effect. We find that if the source of heterogeneity and omitted variable are jointly independent of policy or treatment, then the OLS estimate on the interaction term between the treatment and endogenous factor turns out to be consistent.

Keywords: heterogeneity; interaction term; omitted variable bias; random experiments; treatment effect (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (130)

Downloads: (external link)
https://doi.org/10.1515/jem-2013-0012 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Exogenous Treatment and Endogenous Factors: Vanishing of Omitted Variable Bias on the Interaction Term (2012)
Working Paper: Exogenous Treatment and Endogenous Factors: Vanishing of Omitted Variable Bias on the Interaction Term (2011)
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:bpj:jecome:v:5:y:2016:i:1:p:71-77:n:2

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/jem/html

DOI: 10.1515/jem-2013-0012

Access Statistics for this article

Journal of Econometric Methods is currently edited by Tong Li and Zhongjun Qu

More articles in Journal of Econometric Methods from De Gruyter
Bibliographic data for series maintained by Peter Golla ().