Evaluating local average and quantile treatment effects under endogeneity based on instruments: a review

Martin Huber and Kaspar Wüthrich

No 479, FSES Working Papers from Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland

Abstract: This paper provides a review of methodological advancements in the evaluation of heterogeneous treatment effect models based on instrumental variable (IV) methods. We focus on models that achieve identification through a monotonicity assumption on the selection equation and analyze local average and quantile treatment effects for the subpopulation of compliers. We start with a comprehensive discussion of the binary treatment and binary instrument case which is relevant for instance in randomized experiments with imperfect compliance. We then review extensions to identification and estimation with covariates, multi-valued and multiple treatments and instruments, outcome attrition and measurement error, and the identification of direct and indirect treatment effects, among others. We also discuss testable implications and possible relaxations of the IV assumptions, approaches to extrapolate from local to global treatment effects, and the relationship to other IV approaches.

Keywords: instrument; LATE; treatment effects; selection on unobservables (search for similar items in EconPapers)
JEL-codes: C26 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2017-02-24
New Economics Papers: this item is included in nep-ecm
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