Structural Equations, Treatment Effects and Econometric Policy Evaluation

83 Pages Posted: 7 Oct 2012

See all articles by James J. Heckman

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Edward Vytlacil

Yale University - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: April 2005

Abstract

This paper uses the marginal treatment effect (MTE) to unify the nonparametric literature on treatment effects with the econometric literature on structural estimation using a nonparametric analog of a policy invariant parameter; to generate a variety of treatment effects from a common semiparametric functional form; to organize the literature on alternative estimators; and to explore what policy questions commonly used estimators in the treatment effect literature answer. A fundamental asymmetry intrinsic to the method of instrumental variables is noted. Recent advances in IV estimation allow for heterogeneity in responses but not in choices, and the method breaks down when both choice and response equations are heterogeneous in a general way.

Suggested Citation

Heckman, James J. and Vytlacil, Edward J., Structural Equations, Treatment Effects and Econometric Policy Evaluation (April 2005). NBER Working Paper No. w11259. Available at SSRN: https://ssrn.com/abstract=2158301

James J. Heckman (Contact Author)

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Edward J. Vytlacil

Yale University - Department of Economics ( email )

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