American Economic Review Vol. 103 No. 3 2013
What Do Instrumental Variable Models Deliver with Discrete Dependent Variables?
Abstract
We compare nonparametric instrumental variables (IV) models with linear models and 2SLS methods when dependent variables are discrete. A 2SLS method can deliver a consistent estimator of a Local Average Treatment Effect but is not informative about other treatment effect parameters. The IV models set identify a range of interesting structural and treatment effect parameters. We give set identification results for a counterfactual probability and an Average Treatment Effect in a IV binary threshold crossing model. We illustrate using data on female employment and family size (employed by Joshua Angrist and William Evans (1998)) and compare with their LATE estimates.
- DOI
- 10.1257/aer.103.3.557
- Volume
- 103
- Issue
- 3
- Pages
- 557-562
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref