 The interpretation of 2SLS with a continuous instrument: A weighted LATE representationLuis A.F. Alvarez and Rodrigo Toneto Economics Letters, 2024, vol. 237, issue C Abstract: This note introduces a novel weighted local average treatment effect representation for the two-stages least-squares (2SLS) estimand in the continuous instrument with binary treatment case. Under standard conditions, we obtain weights that are nonnegative, integrate to unity, and assign larger values to instrument support points that deviate from their average. Our representation does not require instruments to be discretized nor relies on limiting arguments, such as those used in the definition of the marginal treatment effect (MTE). The pattern of the weights also has a clear interpretation. We believe these features of the representation to be useful for applied researchers when communicating their results. As a direct byproduct of our approach, we also obtain a representation of the 2SLS estimand as a weighted average of treatment effects among “marginal compliance” groups, without having to resort to the threshold-crossing representation underlying the MTE construction. The latter representation has an intuitive interpretation as well. Keywords: Instrumental variables; Local average treatment effects; Underlying weights (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:237:y:2024:i:c:s0165176524001411 DOI: 10.1016/j.econlet.2024.111658 Access Statistics for this article Economics Letters is currently edited by Economics Letters Editorial Office More articles in Economics Letters from Elsevier |
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