Interpreting TSLS Estimators in Information Provision Experiments

Vod Vilfort and Whitney Zhang

Papers from arXiv.org

Abstract: To estimate the causal effects of beliefs on actions, researchers often run information provision experiments. We consider the causal interpretation of two-stage least squares (TSLS) estimators in these experiments. We characterize common TSLS estimators as weighted averages of causal effects, and interpret these weights under general belief updating conditions that nest parametric models from the literature. Our framework accommodates TSLS estimators for both passive and active control designs. Notably, we find that some passive control estimators allow for negative weights, which compromises their causal interpretation. We give practical guidance on such issues, and illustrate our results in two empirical applications.

Date: 2023-09, Revised 2024-06
New Economics Papers: this item is included in nep-ecm, nep-exp and nep-ger
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