Unobservable Selection and Coefficient Stability: Theory and Validation
AbstractA common heuristic for evaluating robustness of results to omitted variable bias is to look at coefficient movements after inclusion of controls. This heuristic is informative only if selection on observables is proportional to selection on unobservables. I formalize this link, drawing on theory in Altonji, Elder and Taber (2005) and show how, with this assumption, coefficient movements, along with movements in R-squared values, can be used to calculate omitted variable bias. I discuss empirical implementation and describe a formal bounding argument to replace the coefficient movement heuristic. I show two validation exercises suggesting that this bounding argument would perform well empirically. I discuss application of this procedure to a large set of publications in economics, and use evidence from randomized studies to draw guidelines as to appropriate bounding values.
Download InfoIf 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.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19054.
Date of creation: May 2013
Date of revision:
Note: HC LS
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
- I1 - Health, Education, and Welfare - - Health
- I12 - Health, Education, and Welfare - - Health - - - Health Production
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-24 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Julia Cagé & Valeria Rueda, 2013. "The long Term Effects of the Printing Press in Sub Saharan Africa," Working Papers halshs-00844446, HAL.
- Julia Cagé & Valeria Rueda, 2013. "The long Term Effects of the Printing Press in Sub Saharan Africa," PSE Working Papers halshs-00844446, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.