Additive Nonparametric Regression in the Presence of Endogenous Regressors

53 Pages Posted: 3 May 2014

See all articles by Deniz Ozabaci

Deniz Ozabaci

State University of New York, Binghamton

Daniel J. Henderson

University of Alabama; Institute for the Study of Labor (IZA)

Liangjun Su

Tsinghua University

Multiple version iconThere are 2 versions of this paper

Abstract

In this paper we consider nonparametric estimation of a structural equation model under full additivity constraint. We propose estimators for both the conditional mean and gradient which are consistent, asymptotically normal, oracle efficient and free from the curse of dimensionality. Monte Carlo simulations support the asymptotic developments. We employ a partially linear extension of our model to study the relationship between child care and cognitive outcomes. Some of our (average) results are consistent with the literature (e.g., negative returns to child care when mothers have higher levels of education). However, as our estimators allow for heterogeneity both across and within groups, we are able to contradict many findings in the literature (e.g., we do not find any significant differences in returns between boys and girls or for formal versus informal child care).

Keywords: oracle estimation, generated regressors, endogeneity, additive regression, structural equation, child care, nonparametric regression, test scores

JEL Classification: C14, C36, I21, J13

Suggested Citation

Ozabaci, Deniz and Henderson, Daniel J. and Su, Liangjun, Additive Nonparametric Regression in the Presence of Endogenous Regressors. IZA Discussion Paper No. 8144, Available at SSRN: https://ssrn.com/abstract=2432428 or http://dx.doi.org/10.2139/ssrn.2432428

Deniz Ozabaci (Contact Author)

State University of New York, Binghamton ( email )

Daniel J. Henderson

University of Alabama ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-8991 (Phone)

HOME PAGE: http://cba.ua.edu/~djhender

Institute for the Study of Labor (IZA) ( email )

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

HOME PAGE: http://www.iza.org/index_html?lang=en&mainframe=http%3A//www.iza.org/en/webcontent/personnel/photos/

Liangjun Su

Tsinghua University ( email )

B606 Lihua Building
School of Economics and Management
Beijing, Beijing 100084
China

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