Advanced Search
MyIDEAS: Login to save this paper or follow this series

Instrumental Variables: A Cautionary Tale

Contents:

Author Info

  • James J. Heckman

Abstract

This paper considers the use of instrumental variables to estimate the mean effect of treatment on the treated. It reviews previous work on this topic by Heckman and Robb (1985, 1986) and demonstrates that (a) unless the effect of treatment is the same for everyone (conditional on observables), or (b) treatment effects are variable across persons but the person-specific component of the variability not forecastable by observables does not determine participation in the program, widely-used instrumental variable methods produce inconsistent estimators of the parameter of interest. Neither assumption is very palatable. The first assumes a homogeneity that is implausible. The second assumes either very rich data available to the econometrician or that the persons being studied either do not have better information than the econometrician or that they do not use it. Instrumental variable methods do not provide a general solution to the evaluation problem.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/t0185.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Technical Working Papers with number 0185.

as in new window
Length:
Date of creation: Sep 1995
Date of revision:
Handle: RePEc:nbr:nberte:0185

Note: LS
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, American Economic Association, vol. 76(4), pages 604-20, September.
  2. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," American Economic Review, American Economic Association, American Economic Association, vol. 80(3), pages 313-36, June.
  3. James J. Heckman, 1977. "Dummy Endogenous Variables in a Simultaneous Equation System," NBER Working Papers 0177, National Bureau of Economic Research, Inc.
  4. Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, Econometric Society, vol. 58(5), pages 1121-49, September.
  5. J.D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0136, National Bureau of Economic Research, Inc.
  6. James J. Heckman & Jeffrey A. Smith, 1998. "Evaluating the Welfare State," NBER Working Papers 6542, National Bureau of Economic Research, Inc.
  7. Nancy Clements & James Heckman & Jeffrey Smith, 1994. "Making the Most Out Of Social Experiments: Reducing the Intrinsic Uncertainty in Evidence from Randomized Trials with an Application to the JTPA Exp," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0149, National Bureau of Economic Research, Inc.
  8. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(5), pages S7-36, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Aki Kangasharju, 2005. "Do Wages Subsidies Increase Employment in Subsidised Firms?," Discussion Papers, Government Institute for Economic Research Finland (VATT) 378, Government Institute for Economic Research Finland (VATT).
  2. Lanot, G. & Walker, I., 1993. "The Union/Non-Union Wage Differential: an Application of Semi-Parametric Methods," Papers, Laval - Recherche en Politique Economique 9337, Laval - Recherche en Politique Economique.
  3. Lach, Saul, 2002. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 50(4), pages 369-90, December.
  4. Francisco Gallego, 2002. "Competencia y Resultados Educativos: Teoría y Evidencia para Chile," Documentos de Trabajo, Instituto de Economia. Pontificia Universidad Católica de Chile. 217, Instituto de Economia. Pontificia Universidad Católica de Chile..
  5. Lorraine Dearden, 1999. "Qualifications and earnings in Britain: how reliable are conventional OLS estimates of the returns to education?," IFS Working Papers, Institute for Fiscal Studies W99/07, Institute for Fiscal Studies.
  6. Freund, D.A. & Kniesner, T.J. & LoSasso, A.T., 1996. "How Managed Care Affects Medicaid Utilization: A Synthetic Difference-in-Difference Zero-Inflated Count Model," Discussion Paper, Tilburg University, Center for Economic Research 1996-40, Tilburg University, Center for Economic Research.
  7. Miguel A. Malo & Fernando Munoz-Bullon, 2005. "Job Matching Quality Effects Of Employment Promotion Measures For People With Disabilities," Business Economics Working Papers, Universidad Carlos III, Departamento de Economía de la Empresa wb055315, Universidad Carlos III, Departamento de Economía de la Empresa.
  8. Shlomo Yitzhaki & Edna Schechtman, 2004. "The Gini Instrumental Variable, or the “double instrumental variable” estimator," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 287-313.
  9. Miguel Angel Malo & Fernando Muñoz-Bullón, 2006. "Employment promotion measures and the quality of the job match for persons with disabilities," Hacienda Pública Española, IEF, IEF, vol. 179(4), pages 79-111, September.
  10. Yanovitzky, Itzhak & Zanutto, Elaine & Hornik, Robert, 2005. "Estimating causal effects of public health education campaigns using propensity score methodology," Evaluation and Program Planning, Elsevier, Elsevier, vol. 28(2), pages 209-220, May.
  11. Lorraine Dearden, 1998. "Ability, families, education and earnings in Britain," IFS Working Papers, Institute for Fiscal Studies W98/14, Institute for Fiscal Studies.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberte:0185. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.