IsoLATEing: Identifying Counterfactual-Specific Treatment Effects with Cross-Stratum Comparisons

24 Pages Posted: 19 Dec 2015 Last revised: 12 Feb 2018

See all articles by Peter Hull

Peter Hull

Microsoft Corporation - Microsoft Research New England; University of Chicago

Date Written: February 11, 2018

Abstract

Instrumental variable (IV) estimates may be difficult to interpret when there are multiple alternatives to treatment. I consider identification of counterfactual-specific local average treatment effects via interactions of the instrument and stratifying controls. Deriving general IV estimands, I establish identification under mean-independence of complier effects visa-vis the strata. I then extend IV to a two-step procedure valid under conditional independence. The theory is illustrated in the context of GED certification, where individuals may otherwise graduate high school or drop out. I also show how it can be used to address differential attrition with an application to the Oregon Medicaid experiment

Keywords: local average treatment effects, compliers, returns to schooling, Medicare, attrition

JEL Classification: C26, C36, I11, I21

Suggested Citation

Hull, Peter, IsoLATEing: Identifying Counterfactual-Specific Treatment Effects with Cross-Stratum Comparisons (February 11, 2018). Available at SSRN: https://ssrn.com/abstract=2705108 or http://dx.doi.org/10.2139/ssrn.2705108

Peter Hull (Contact Author)

Microsoft Corporation - Microsoft Research New England ( email )

One Memorial Drive, 14th Floor
Cambridge, MA 02142
United States

HOME PAGE: http://https://www.microsoft.com/en-us/research/people/pehull/

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

HOME PAGE: http://about.peterhull.net/

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