Defying the LATE? Identification of local treatment effects when the instrument violates monotonicity

Clément de Chaisemartin

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: The instrumental variable method relies on strong "no-defiers" condition, which requires that the instrument affect every subject's treatment decision in the same direction. This paper shows that "no-defiers" can be replaced by a weaker "compliers-defiers" condition, which requires that a subgroup of compliers have the same size and the same distribution of potential outcomes as defiers. This condition is necessary and sufficient for IV to capture causal effects for the reamining part of compliers. In many applications, "compliers-defiers" is a very weak condition. For instance, in Angrist & Evans (1998), 94% of DGPs compatible with the data satisfy "compliers-defiers", while 0% satisfy "no-defiers". JEL classification: Instrumental variable ; heterongeneous effects ; defiers ; single index model JEL codes: C21; C26

Date: 2013
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Related works:
Journal Article: Tolerating defiance? Local average treatment effects without monotonicity (2017)
Working Paper: Defying the LATE? Identication of local treatment eects when the instrument violates monotonicity (2013)
Working Paper: Late again, whithout Monotonicity (2012)
Working Paper: Late Again with Defiers (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1020

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