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Nonparametric "rich covariates" without saturation

Ludgero Glorias, Federico Martellosio, J. M. C. Santos Silva

arXiv 27 May 2025 · Econometrics

arXiv:2505.21213 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We consider two nonparametric approaches to ensure that linear instrumental variables estimators satisfy the rich-covariates condition emphasized by Blandhol et al. (2025), even when the instrument is not unconditionally randomly assigned and the model is not saturated. Both approaches start with a nonparametric estimate of the expectation of the instrument conditional on the covariates, and ensure that the rich-covariates condition is satisfied either by using as the instrument the difference between the original instrument and its estimated conditional expectation, or by adding the estimated conditional expectation to the set of regressors. We derive asymptotic properties when the first step uses kernel regression, and assess finite-sample performance in simulations where we also use neural networks in the first step. Finally, we present an empirical illustration that highlights some significant advantages of the proposed methods.

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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
1Blandhol, C., J. Bonney, M. Mogstad, and A. Torgovitsky (2025) When is TSLS Actually LATE?1.000277100%
2Lee, M.-J (2021) Instrument Residual Estimator for any Response Variable with Endogenous Binary Treatment1.000155100%
3Kim, B. and M.-J. Lee (2024) Instrument-Residual Estimator for Multi-valued Instruments Under Full Monotonicity1.000134100%
4Borusyak, K. and P. Hull (2023) Nonrandom Exposure to Exogenous Shocks1.00073100%
5Kolesár, M (2013) Estimation in an Instrumental Variables Model With Treatment Effect Heterogeneity1.00073100%
6Mogstad, M. and A. Torgovitsky (2024) Instrumental Variables with Unobserved Heterogeneity in Treatment Effects, in1.00064100%
7Lee, M.-J. and C. Han (2024) Ordinary Least Squares and Instrumental-Variables Estimators for any Outcome and Heterogeneity1.00063100%
8Chernozhukov, V., D. Chetverikov, M. Demirer, E. Duflo, C. Hansen, W… (2018) Double/Debiased Machine Learning for Treatment and Structural Parameters0.98522595%
9Soczyński, T (2024) When Should We (Not) Interpret Linear IV Estimands as LATE?0.92843100%
10Abadie, A (2003) Semiparametric Instrumental Variable Estimation of Treatment Response Models0.87472100%

Showing the top 10 of 49 scored citations.