Sharp Bounds in the Latent Index Selection Model

Philip Marx

Papers from arXiv.org

Abstract: A fundamental question underlying the literature on partial identification is: what can we learn about parameters that are relevant for policy but not necessarily point-identified by the exogenous variation we observe? This paper provides an answer in terms of sharp, analytic characterizations and bounds for an important class of policy-relevant treatment effects, consisting of marginal treatment effects and linear functionals thereof, in the latent index selection model as formalized in Vytlacil (2002). The sharp bounds use the full content of identified marginal distributions, and analytic derivations rely on the theory of stochastic orders. The proposed methods also make it possible to sharply incorporate new auxiliary assumptions on distributions into the latent index selection framework. Empirically, I apply the methods to study the effects of Medicaid on emergency room utilization in the Oregon Health Insurance Experiment, showing that the predictions from extrapolations based on a distribution assumption (rank similarity) differ substantively and consistently from existing extrapolations based on a parametric mean assumption (linearity). This underscores the value of utilizing the model's full empirical content in combination with auxiliary assumptions.

Date: 2020-12, Revised 2023-04
New Economics Papers: this item is included in nep-ecm and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://arxiv.org/pdf/2012.02390 Latest version (application/pdf)

Related works:
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:arx:papers:2012.02390

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().