Unordered Monotonicity

James Heckman and Rodrigo Pinto

No 10821, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper presents a new monotonicity condition for unordered discrete choice models with multiple treatments. Unlike a less general version of monotonicity in binary and ordered choice models, monotonicity in unordered discrete choice models along with other standard assumptions does not necessarily identify causal effects defined by variation in instruments, although in some cases it does. Our condition implies and is implied by additive separability of the choice equations in terms of observables and unobservables. These results follow from properties of binary matrices developed in this paper. We investigate conditions under which Unordered Monotonicity arises as a consequence of choice behavior. We represent IV estimators of counterfactuals as solutions to discrete mixture problems.

Keywords: Generalized Roy Model; revealed preference; monotonicity; instrumental variables; selection bias; identification; binary matrices; discrete choice; discrete mixtures (search for similar items in EconPapers)
JEL-codes: C93 I21 J15 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2017-06
New Economics Papers: this item is included in nep-dcm and nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Econometrica, 2018, 86 (1), 1 - 35 [revised version available as NBER Working Paper No. 23497 ]

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Journal Article: Unordered Monotonicity (2018)
Working Paper: Unordered Monotonicity (2017)
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