On falsification of the binary instrumental variable model

Linbo Wang, James M. Robins and Thomas S. Richardson

Biometrika, 2017, vol. 104, issue 1, 229-236

Abstract: SUMMARY Instrumental variables are widely used for estimating causal effects in the presence of unmeasured confounding. The discrete instrumental variable model has testable implications for the law of the observed data. However, current assessments of instrumental validity are typically based solely on subject-matter arguments rather than these testable implications, partly due to a lack of formal statistical tests with known properties. In this paper, we develop simple procedures for testing the binary instrumental variable model. Our methods are based on existing techniques for comparing two treatments, such as the $t$-test and the Gail–Simon test. We illustrate the importance of testing the instrumental variable model by evaluating the exogeneity of college proximity using the National Longitudinal Survey of Young Men.

Keywords: Binary response; Gail–Simon test; Instrumental variable; Qualitative interaction; t-test; Two-by-two table (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (3)

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