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Inference for Two-Stage Extremum Estimators

Aristide Houndetoungan, Abdoul Haki Maoude

arXiv 7 Feb 2024 · Econometrics · 2 citations (OpenAlex)

arXiv:2402.05030 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We present a simulation-based inference approach for two-stage estimators, focusing on extremum estimators in the second stage. We accommodate a broad range of first-stage estimators, including extremum estimators, high-dimensional estimators, and other types of estimators such as Bayesian estimators. The key contribution of our approach lies in its ability to estimate the asymptotic distribution of two-stage estimators, even when the distributions of both the first- and second-stage estimators are non-normal and when the second-stage estimator's bias, scaled by the square root of the sample size, does not vanish asymptotically. This enables reliable inference in situations where standard methods fail. Additionally, we propose a debiased estimator, based on the mean of the estimated distribution function, which exhibits improved finite sample properties. Unlike resampling methods, our approach avoids the need for multiple calculations of the two-stage estimator. We illustrate the effectiveness of our method in an empirical application on peer effects in adolescent fast-food consumption, where we address the issue of biased instrumental variable estimates resulting from many weak instruments.

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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
1Cattaneo, M. D., M. Jansson, and X. Ma (2019) Two-step estimation and inference with possibly many included covariates1.000104100%
2Amemiya, T (1985) Advanced econometrics0.87452100%
3Murphy, K. M. and R. H. Topel (2002) Estimation and inference in two-step econometric models0.84333100%
4Newey, W. K. and D. McFadden (1994) Large sample estimation and hypothesis testing0.84333100%
5Ackerberg, D., X. Chen, and J. Hahn (2012) A practical asymptotic variance estimator for two-step semiparametric estimators0.73732100%
6Belloni, A., V. Chernozhukov, I. Fernandez-Val, and C. Hansen (2017) Program evaluation and causal inference with high-dimensional data0.73732100%
7Boucher, V. and A. Houndetoungan (2023) Estimating peer effects using partial network data0.73732100%
8Bramoullé, Y., H. Djebbari, and B. Fortin (2009) Identification of peer effects through social networks0.73732100%
9Chen, X. and Z. Liao (2015) Sieve semiparametric two-step GMM under weak dependence0.73732100%
10Chernozhukov, V., D. Chetverikov, M. Demirer, E. Duflo, C. Hansen, W… (2018) Double/debiased machine learning for treatment and structural parameters: Double/debiased machine learning0.73732100%

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

Citing paperIntensityMentionsSections
1Quantile Peer Effect Models10pt10pt For comments and suggestions, I am grateful to Yann Bramoullé, Vincent Boucher, Firmin Doko Tchatoka, Mathieu Lambotte, and Marie Aurélie Lapierre. This research uses data from the National Longitudinal Study of Adolescent to Adult Health (Add Health), a program that is directed by Kathleen Mullan Harris and designed by J. Richard Udry, Peter S. Bearman, and Kathleen Mullan Harris at the University of North Carolina at Chapel Hill, and funded by Grant P01-HD31921 from the Eunice Kennedy Shriver National Institute of Child Health and Human Development, with cooperative funding from 23 other US federal agencies and foundations. Special acknowledgment is given to Ronald R. Rindfuss and Barbara Entwisle for assistance in the original design. Information on how to obtain Add Health data files is available on the Add Health website (www.cpc.unc.edu/addhealth). No direct support was received from Grant P01-HD31921 for this research. An R package, including all replication codes, is available at: https://github.com/ahoundetoungan/QuantilePeer0.40511
2Count Data Models with Heterogeneous Peer Effects under Rational Expectations0.00011