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A Dimension-Agnostic Bootstrap Anderson-Rubin Test For Instrumental Variable Regressions

Dennis Lim, Wenjie Wang, Yichong Zhang

arXiv 2 Dec 2024 · Econometrics · 1 citations (OpenAlex)

arXiv:2412.01603 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Weak-identification-robust tests for instrumental variable (IV) regressions are typically developed separately depending on whether the number of IVs is treated as fixed or increasing with the sample size, forcing researchers to make a stance on the asymptotic behavior, which is often ambiguous in practice. This paper proposes a bootstrap-based, dimension-agnostic Anderson-Rubin (AR) test that achieves correct asymptotic size regardless of whether the number of IVs is fixed or diverging, and even accommodates cases where the number of IVs exceeds the sample size. By incorporating ridge regularization, our approach reduces the effective rank of the projection matrix and yields regimes where the limiting distribution of the AR statistic can be a weighted chi-squared, a normal, or a mixture of the two. Strong approximation results ensure that the bootstrap procedure remains uniformly valid across all regimes, while also delivering substantial power gains over existing methods by exploiting rank reduction.

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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
1Dov\`, M.-S., A. B. Kock, and S. Mavroeidis (2024) A ridge-regularized jackknifed anderson-rubin test1.000104100%
2Card, D. (2009, May) (2009) Immigration and inequality1.00063100%
3Mikusheva, A. and L. Sun (2022) Inference with many weak instruments0.97614793%
4Navjeevan, M (2023) An identification and dimensionality robust test for instrumental variables models0.9619489%
5Crudu, F., G. Mellace, and Z. Sándor (2021) Inference in instrumental variable models with heteroskedasticity and many instruments0.9568588%
6Anatolyev, S. and M. Slvsten (2023) Testing many restrictions under heteroskedasticity0.9568488%
7Belloni, A., D. Chen, V. Chernozhukov, and C. Hansen (2012) Sparse models and methods for optimal instruments with an application to eminent domain0.9416383%
8Kline, P., R. Saggio, and M. Slvsten (2020) Leave-out estimation of variance components0.92843100%
9Carrasco, M. and G. Tchuente (2015) Regularized liml for many instruments0.92843100%
10Carrasco, M. and G. Tchuente (2016) Efficient estimation with many weak instruments using regularization techniques0.92843100%

Showing the top 10 of 100 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
1Robust Inference with High-Dimensional Instruments0.64422
2An Empirical Comparison of Weak-IV-Robust Procedures in Just-Identified Models0.40511
3Wild Bootstrap Inference for Linear Regressions with Many Covariates0.40511
4An Improved Inference for IV Regressions0.40511
5Cluster-Robust Inference for Quadratic Forms0.40511