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Instrumental Variable Estimation of Nonparametric Models

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Author Info
Whitney K. Newey
James L. Powell
Abstract

In econometrics there are many occasions where knowledge of the structural relationship among dependent variables is required to answer questions of interest. This paper gives identification and estimation results for nonparametric conditional moment restrictions. We characterize identification of structural functions as completeness of certain conditional distributions, and give sufficient identification conditions for exponential families and discrete variables. We also give a consistent, nonparametric estimator of the structural function. The estimator is nonparametric two-stage least squares based on series approximation, which overcomes an ill-posed inverse problem by placing bounds on integrals of higher-order derivatives. Copyright The Econometric Society 2003.

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Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 71 (2003)
Issue (Month): 5 (09)
Pages: 1565-1578
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Handle: RePEc:ecm:emetrp:v:71:y:2003:i:5:p:1565-1578

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