Abstract The effect of the full treatment is a primary parameter of interest in policy evaluation, while often the effect of a subset of treatment is estimated. We partially identify the local average treatment effect of receiving full treatment (LAFTE) using an instrumental variable that may induce individuals into subsets of treatment (partial compliers). We show that partial compliers violate the standard exclusion restriction, necessary conditions on the absence of partial compliers are testable, and partial identification holds under a double exclusion restriction. We identify partial compliers in four applications and estimate informative bounds on the LAFTE in three of them.

Abstract We show how random subspace methods can be adapted to estimating local projections with many controls. Random subspace methods have their roots in the machine learning literature and are implemented by averaging over regressions estimated over different combinations of subsets of these controls. We document three key results: (i) Our approach can successfully recover the impulse response functions across Monte Carlo experiments representative of different macroeconomic settings and identification schemes. (ii) Our results suggest that random subspace methods are more accurate than other dimension reduction methods if the underlying large dataset has a factor structure similar to typical macroeconomic datasets such as FRED-MD. (iii) Our approach leads to differences in the estimated impulse response functions relative to benchmark methods when applied to two widely studied empirical applications.