Year: 2006
Type: report
Abstract: This paper examines the properties of instrumental variables (IV) applied to models with essential heterogeneity, that is, models where responses to interventions are heterogeneous and agents adopt treatments (participate in programs) with at least partial knowledge of their idiosyncratic response.We analyze two-outcome and multiple-outcome models including ordered and unordered choice models.We allow for transition-specific and general instruments.We generalize previous analyses by developing weights for treatment effects for general instruments.We develop a simple test for the presence of essential heterogeneity.We note the asymmetry of the model of essential heterogeneity: outcomes of choices are heterogeneous in a general way; choices are not.When both choices and outcomes are permitted to be symmetrically heterogeneous, the method of IV breaks down for estimating treatment parameters.
DOI: 10.3386/w12574
Authors: James Heckman, Sergio Urzua, Edward Vytlacil
Institutions: National Bureau of Economic Research, University of Chicago
Language: English
Subfield: Statistics and Probability
Field: Mathematics
Domain: Physical Sciences
Open Access status: green
Awards: Research on Dynamic Models of Earnings and Human Capital Accumulation in Partial and General Equilibrium settings, Collaborative Research on the Formulation, Estimation, and Identification of Hedonic Pricing, Demand and Supply Models, Alternative Approaches to the Evaluation of Public Policy Interventions with an Emphasis on Policies Designed to Foster Human Capital
OpenAlex ID: W1992186241