Endogeneity and Non-Response Bias in Treatment Evaluation: Nonparametric Identification of Causal Effects by Instruments

36 Pages Posted: 19 Oct 2015

See all articles by Hans Fricke

Hans Fricke

University of St. Gallen - Swiss Institute for Empirical Economic Research; Stanford University

Markus Frölich

Universität Mannheim, Chair of Econometrics

Martin Huber

University of Fribourg

Michael Lechner

University of St. Gallen - Swiss Institute for Empirical Economic Research

Abstract

This paper proposes a nonparametric method for evaluating treatment effects in the presence of both treatment endogeneity and attrition/non-response bias, using two instrumental variables. Making use of a discrete instrument for the treatment and a continuous instrument for non-response/attrition, we identify the average treatment effect on compliers as well as the total population and suggest non- and semiparametric estimators. We apply the latter to a randomized experiment at a Swiss University in order to estimate the effect of gym training on students' self-assessed health. The treatment (gym training) and attrition are instrumented by randomized cash incentives paid out conditional on gym visits and by a cash lottery for participating in the follow-up survey, respectively.

Keywords: endogeneity, attrition, local average treatment effect, weighting, instrument, experiment

JEL Classification: C14, C21, C23, C24, C26

Suggested Citation

Fricke, Hans and Frölich, Markus and Huber, Martin and Lechner, Michael, Endogeneity and Non-Response Bias in Treatment Evaluation: Nonparametric Identification of Causal Effects by Instruments. IZA Discussion Paper No. 9428, Available at SSRN: https://ssrn.com/abstract=2675485

Hans Fricke (Contact Author)

University of St. Gallen - Swiss Institute for Empirical Economic Research ( email )

Varnbüelstr. 14
St.Gallen, CH-9000
Switzerland

Stanford University ( email )

Stanford, CA 94305
United States

Markus Frölich

Universität Mannheim, Chair of Econometrics ( email )

L7, 3-5
68131 Mannheim
D-Mannheim, 68131
Germany

HOME PAGE: http://froelich.vwl.uni-mannheim.de

Martin Huber

University of Fribourg ( email )

Bd de Pérolles 90
Fribourg, Fribourg CH-1700
Switzerland

Michael Lechner

University of St. Gallen - Swiss Institute for Empirical Economic Research ( email )

Varnbuelstrasse 14
St. Gallen, 9000
Switzerland
+41 71 224 2320 (Phone)

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