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Identification and Estimation of Local Average Treatment Effects

28 Pages Posted: 27 Jun 2007  

Joshua D. Angrist

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Guido W. Imbens

Stanford Graduate School of Business

Date Written: February 1995

Abstract

We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Suggested Citation

Angrist, Joshua D. and Imbens, Guido W., Identification and Estimation of Local Average Treatment Effects (February 1995). NBER Working Paper No. t0118. Available at SSRN: https://ssrn.com/abstract=995455

Joshua Angrist (Contact Author)

National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Guido W. Imbens

Stanford Graduate School of Business ( email )

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Stanford, CA 94305-5015
United States

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