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Partial Identification of Discrete Counterfactual Distributions with Sequential Update of Information

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  • Stefan Boes

    ()
    (Socioeconomic Institute, University of Zurich)

Abstract

The credibility of standard instrumental variables assumptions is often under dispute. This paper imposes weak monotonicity in order to gain information on counterfactual outcomes, but avoids independence or exclusion restrictions. The outcome process is assumed to be sequentially ordered, building up and depending on the information level of agents. The potential outcome distribution is assumed to weakly increase (or decrease) with the instrument, conditional on the continuation up to a certain stage. As a general result, the counterfactual distributions can only be bounded, but the derived bounds are informative compared to the no-assumptions bounds thus justifying the instrumental variables terminology. The construction of bounds is illustrated in two data examples.

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File URL: http://www.soi.uzh.ch/research/wp/2009/wp0918.pdf
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Bibliographic Info

Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0918.

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Length: 37 pages
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:soz:wpaper:0918

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Keywords: nonparametric bounds; treatment effects; endogeneity; binary choice; monotone instrumental variables; policy evaluation;

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Cited by:
  1. Stefan Boes, 2009. "Bounds on Counterfactual Distributions Under Semi-Monotonicity Constraints," SOI - Working Papers 0920, Socioeconomic Institute - University of Zurich.

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