Tightening Bounds in Triangular Systems

8 Pages Posted: 22 Jun 2014 Last revised: 12 Nov 2014

See all articles by Désiré Kédagni

Désiré Kédagni

Iowa State University - Department of Economics

Ismael Mourifie

University of Toronto - Department of Economics

Date Written: June 20, 2014

Abstract

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

Kédagni, Désiré and Mourifie, Ismael, Tightening Bounds in Triangular Systems (June 20, 2014). Forthcoming, Economics Letters , Available at SSRN: https://ssrn.com/abstract=2457275 or http://dx.doi.org/10.2139/ssrn.2457275

Désiré Kédagni

Iowa State University - Department of Economics ( email )

260 Heady Hall
Ames, IA 50011
United States

Ismael Mourifie (Contact Author)

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S3G7
Canada

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