Identification in Models with Discrete Variables

43 Pages Posted: 23 Jan 2013

See all articles by Lukas Laffers

Lukas Laffers

University of Matej Bel - Department of Mathematics

Date Written: January 8, 2013

Abstract

This paper provides a new simple and computationally tractable method for determining an identified set that can account for a broad set of economic models when economic variables are discrete. Using this method it is shown on a simple example how can imperfect instruments affect the size of the identified set when strict exogeneity is relaxed. It could be of great interest to know to what extent are the results driven by the exogeneity assumption which is often a subject of controversy. Moreover, flexibility gained from the new proposed method suggests that the determination of the identified set need not be application-specific anymore. This paper presents a unifying framework that approaches identification in an algorithmic way.

JEL Classification: C10, C21, C26, C61

Suggested Citation

Laffers, Lukas, Identification in Models with Discrete Variables (January 8, 2013). NHH Dept. of Economics Discussion Paper No. 01/2013. Available at SSRN: https://ssrn.com/abstract=2205827 or http://dx.doi.org/10.2139/ssrn.2205827

Lukas Laffers (Contact Author)

University of Matej Bel - Department of Mathematics ( email )

Tajovskeho 40
Banska Bystrica, 97401
Slovakia

HOME PAGE: http://www.lukaslaffers.com

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