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Estimating Endogenous Effects on Ordinal Outcomes

Andrew Chesher¹; Adam M. Rosen²; Zahra Siddique³

¹ UCL and CeMMAP · ² Duke University and CeMMAP · ³ University of Bristol

Abstract We examine the use of instrumental variable (IV) methods to measure the effect of a ceteris paribus change in an endogenous variable on an ordered outcome. Specifically, we use these methods to investigate the effect of neighborhood characteristics on subjective well-being (SWB) among participants in the Moving to Opportunity (MTO) housing voucher experiment. We find that the estimated positive effect of a decrease in neighborhood poverty on SWB is sensitive to the specification of the first-stage auxiliary equation for endogenous neighborhood poverty. Our results highlight the influential role of control function restrictions in complete triangular models.

DOI

10.1162/rest_a_01348

Volume

107 (6)

Pages

1667-1683

Language

en

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BibTeX

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