Beyond Plausibly Exogenous

Tinbergen Institute Discussion Paper 2017-096/V

22 Pages Posted: 20 Oct 2017

See all articles by Hans van Kippersluis

Hans van Kippersluis

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Cornelius A. Rietveld

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Multiple version iconThere are 2 versions of this paper

Date Written: October 20, 2017

Abstract

We synthesize two recent advances in the literature on instrumental variables (IVs) estimation that test and relax the exclusion restriction. Our approach first estimates the direct effect of the IV on the outcome in a subsample for which the IV does not affect the treatment variable. Subsequently, this estimate for the direct effect is used as input for the plausibly exogenous method developed by Conley, Hansen and Rossi (2012). This two-step procedure provides a novel and informed sensitivity analysis for IV estimation. We illustrate the practical use by estimating the causal effect of (i) attending Catholic high school on schooling outcomes, and (ii) the number of children on female labour supply.

Keywords: Instrumental variables, plausibly exogenous, exclusion restriction

JEL Classification: C18, C26, J20

Suggested Citation

van Kippersluis, Hans and Rietveld, Cornelius A., Beyond Plausibly Exogenous (October 20, 2017). Tinbergen Institute Discussion Paper 2017-096/V, Available at SSRN: https://ssrn.com/abstract=3056195 or http://dx.doi.org/10.2139/ssrn.3056195

Hans Van Kippersluis (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burg. Oudlaan 50
Rotterdam, NL 3062 PA
Netherlands

Cornelius A. Rietveld

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
37
Abstract Views
324
PlumX Metrics