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Endogeneity in Weakly Separable Models without Monotonicity

Songnian Chen, Shakeeb Khan, Xun Tang

arXiv 9 Aug 2022 · Econometrics · publishedJournal of Econometrics (2023)

arXiv:2208.05047 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We identify and estimate treatment effects when potential outcomes are weakly separable with a binary endogenous treatment. Vytlacil and Yildiz (2007) proposed an identification strategy that exploits the mean of observed outcomes, but their approach requires a monotonicity condition. In comparison, we exploit full information in the entire outcome distribution, instead of just its mean. As a result, our method does not require monotonicity and is also applicable to general settings with multiple indices. We provide examples where our approach can identify treatment effect parameters of interest whereas existing methods would fail. These include models where potential outcomes depend on multiple unobserved disturbance terms, such as a Roy model, a multinomial choice model, as well as a model with endogenous random coefficients. We establish consistency and asymptotic normality of our estimators.

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Vytlacil and Yildiz (2007) Dummy Endogenous Variables in Weakly Separable Models1.000257100%
2Heckman and Vytlacil (2005) Structural Equations, Treatment Effects, and Econometric Policy Evaluation0.73732100%
3Carneiro and Lee (2009) Estimating distributions of potential outcomes using local instrumental variables with an application to changes in college enro…0.73732100%
4Heckman and Vytlacil (2007) Econometric evaluation of social programs0.64422100%
5Shaikh and Vytlacil (2011) Partial Identification in Triangular Systems of Equations with Binary Dependent Variables0.64422100%
6Vuong and Xu (2017) Counterfactual mapping and individual treatment effects in nonseparable models with binary endogeneity0.64422100%
7Abrevaya and Xu (2022) Estimation of treatment effects under endogenous heteroskedasticity0.51121100%
8Ahn, Powell, Ichimura, and Ruud (2017) Simple Estimators for Invertible Index Models0.51121100%
9Mogstad, Santos, and Torgovitsky (2018) Using Instrumental Variables for Inference About Policy Relevant Treatment Parameters0.51121100%
10Carneiro, Vytlacil, and Heckman (2010) Evaluating Marginal Policy Changes and the Average Effect of Treatment for Individuals at the Margin0.40511100%

Showing the top 10 of 35 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Inference on High Dimensional Selective Labeling Models0.64422