The BMTE Command: Methods for the Estimation of Treatment Effects When Exclusion Restrictions are Unavailable

McCarthy, I., D. Millimet, and R. Tchernis. 2014. “The bmte Command: Methods for the Estimation of Treatment Effects when Exclusion Restrictions are Unavailable,” The Stata Journal 14(3):670-683.

12 Pages Posted: 22 Sep 2013 Last revised: 12 Feb 2015

See all articles by Ian M. McCarthy

Ian M. McCarthy

Emory University - Department of Economics

Daniel L. Millimet

Southern Methodist University (SMU) - Department of Economics; IZA Institute of Labor Economics

Rusty Tchernis

Georgia State University - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: August 1, 2013

Abstract

We present a new Stata command, BMTE (bias-minimizing treatment e ects), which implements two new estimators proposed in Millimet and Tchernis (2012) designed to estimate the effect of treatment when there exists selection on unobserved variables and appropriate exclusion restrictions are unavailable. In addition, the BMTE command estimates treatment effects from several alternative estimators that also do not rely on exclusion restrictions for identification of the causal effects of the treatment, including: 1) Heckman's two-step estimator (Heckman 1976, 1979); 2) a control function approach outlined in Heckman et al. (1999) and Navarro (2008); and 3) a more recent estimator proposed by Klein and Vella (2009) that exploits heteroskedasticity for identification. By implementing two new estimators alongside pre-existing estimators, the BMTE command provides a picture of the average causal effects of the treatment across a variety of assumptions. We present an example application of the command following Millimet and Tchernis (2012).

Keywords: treatment effects, propensity score, unconfoundedness, selection on unobserved variables

JEL Classification: C13, C39

Suggested Citation

McCarthy, Ian M. and Millimet, Daniel L. and Tchernis, Rusty, The BMTE Command: Methods for the Estimation of Treatment Effects When Exclusion Restrictions are Unavailable (August 1, 2013). McCarthy, I., D. Millimet, and R. Tchernis. 2014. “The bmte Command: Methods for the Estimation of Treatment Effects when Exclusion Restrictions are Unavailable,” The Stata Journal 14(3):670-683., Available at SSRN: https://ssrn.com/abstract=2328796 or http://dx.doi.org/10.2139/ssrn.2328796

Ian M. McCarthy (Contact Author)

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States

Daniel L. Millimet

Southern Methodist University (SMU) - Department of Economics ( email )

Box 750496
Dallas, TX 75275
United States
214-768-3269 (Phone)
214-768-1821 (Fax)

HOME PAGE: http:\\www.smu.edu\~millimet

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Rusty Tchernis

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

HOME PAGE: http://www2.gsu.edu/~ecort

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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