A Note on Endogenous Control Variables in Evaluation Studies

University of St. Gallen Economics Discussion Paper No. 2005-16

13 Pages Posted: 22 Aug 2005

See all articles by Michael Lechner

Michael Lechner

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

Date Written: August 2005

Abstract

The paper addresses the issue of potentially endogenous control variables in evaluation studies based on the assumption that selection bias can be avoided by conditioning on observed variables. It shows that the standard formulation of the conditional independence (CIA) or selection on observables assumption obscures the endogeneity problem. The paper clarifies the issue by suggesting a CIA based on exogenous (potential) outcomes as well as explicit exogeneity conditions. The refined CIA allows to asses the endogeneity bias as well as the plausibility of the CIA, because it allows a separate discussion of (i) the problems of missing variables that are necessary to avoid selection bias, and (ii) the problem that some of the control variables may be influenced by the treatment.

Keywords: Evaluation studies, matching methods, conditional independence assumption, endogeneity

JEL Classification: C21, C31

Suggested Citation

Lechner, Michael, A Note on Endogenous Control Variables in Evaluation Studies (August 2005). University of St. Gallen Economics Discussion Paper No. 2005-16, Available at SSRN: https://ssrn.com/abstract=783665 or http://dx.doi.org/10.2139/ssrn.783665

Michael Lechner (Contact Author)

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

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
185
Abstract Views
1,389
rank
178,070
PlumX Metrics