Should instrumental variables be used as matching variables?

Jeffrey Wooldridge

Research in Economics, 2016, vol. 70, issue 2, 232-237

Abstract: I show that for a linear model and estimating a coefficient on an endogenous explanatory variable, adding covariates that satisfy instrumental variables assumptions increases the amount of inconsistency. A special case is an endogenous binary treatment and estimating a constant treatment effect when matching on covariates that satisfy instrumental variables, rather than ignoribility, assumptions. I also establish a general result that implies that regression adjustment using the propensity score based on instrumental variables actually maximizes the inconsistency among regression-type estimators.

Keywords: Matching; Instrumental variable; Inconsistency; Treatment effect (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:70:y:2016:i:2:p:232-237

DOI: 10.1016/j.rie.2016.01.001

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