On the Estimation of Treatment Effects with Endogenous Misreporting

50 Pages Posted: 19 Dec 2017

See all articles by Pierre Nguimkeu

Pierre Nguimkeu

Georgia State University

Augustine Denteh

Georgia State University - Department of Economics

Rusty Tchernis

Georgia State University - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: December 2017

Abstract

Participation in social programs is often misreported in survey data, complicating the estimation of the effects of those programs. In this paper, we propose a model to estimate treatment effects under endogenous participation and endogenous misreporting. We show that failure to account for endogenous misreporting can result in the estimate of the treatment effect having an opposite sign from the true effect. We present an expression for the asymptotic bias of both OLS and IV estimators and discuss the conditions under which sign reversal may occur. We provide a method for eliminating this bias when researchers have access to information related to both participation and misreporting. We establish the consistency and asymptotic normality of our estimator and assess its small sample performance through Monte Carlo simulations. An empirical example is given to illustrate the proposed method.

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Suggested Citation

Nguimkeu, Pierre and Denteh, Augustine and Tchernis, Rusty, On the Estimation of Treatment Effects with Endogenous Misreporting (December 2017). NBER Working Paper No. w24117. Available at SSRN: https://ssrn.com/abstract=3089514

Pierre Nguimkeu (Contact Author)

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Augustine Denteh

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Rusty Tchernis

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

HOME PAGE: http://www2.gsu.edu/~ecort

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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IZA Institute of Labor Economics ( email )

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Bonn, D-53072
Germany

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