Tightening Bounds in Triangular Systems
8 Pages Posted: 22 Jun 2014 Last revised: 12 Nov 2014
Date Written: June 20, 2014
This note discusses partial identification in a nonparametric triangular system with discrete endogenous regressors and nonseparable errors. Recently, [Jun, Pinkse and Xu (2011, JPX). Tighter Bounds in Triangular Systems. Journal of Econometrics 161(2), 122-128] provides bounds on the structural function evaluated at particular values using exclusion, exogeneity and rank conditions. We propose a simple idea that often allows to improve the JPX bounds without invoking a new set of assumptions. Moreover, we show how our idea can be used to tighten existing bounds on the structural function in more general triangular systems.
Keywords: Nonparametric triangular systems; Partial identification; Instrumental variables; Rank conditions
JEL Classification: C14, C30, C31
Suggested Citation: Suggested Citation