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Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models

James Heckman and Salvador Navarro ()

No 768, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates four topics. (1) It examines the different roles played by the propensity score (probability of selection) in matching, instrumental variable and control functions methods. (2) It contrasts the roles of exclusion restrictions in matching and selection models. (3) It characterizes the sensitivity of matching to the choice of conditioning variables and demonstrates the greater robustness of control function methods to misspecification of the conditioning variables. (4) It demonstrates the problem of choosing the conditioning variables in matching and the failure of conventional model selection criteria when candidate conditioning variables are not exogenous.

Keywords: identification; discrete choice; instrumental variables; control functions; matching (search for similar items in EconPapers)
JEL-codes: C31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-ecm and nep-ltv
Date: 2003-04
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Published in: Review of Economics and Statistics, 2004, 86(1), 30-57

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http://ftp.iza.org/dp768.pdf (application/pdf)

Related works:
Journal Article: Using Matching, Instrumental Variables, and Control Functions to Estimate Economic Choice Models (2004) Downloads
Working Paper: Using matching, instrumental variables and control functions to estimate economic choice models (2003) Downloads
Working Paper: Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models (2003) Downloads
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