Endogeneity and Non-Response Bias in Treatment Evaluation: Nonparametric Identification of Causal Effects by Instruments
36 Pages Posted: 19 Oct 2015
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
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